Boundless Plains to Share by One Mandate Group

Boundless Plains to Share Australiaâ&#x20AC;&#x2122;s agribusiness partnership with Asia â&#x20AC;&#x201C; century 21

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Australia has long been renowned as a productive and inventive agricultural nation. Its agribusiness sector is advanced and rapidly evolving. Science and technology now drive an industry that is experiencing unprecedented demand for its commodities and products, particularly from Asia. Boundless Plains to Share presents a wide and comprehensive view of Australia’s enterprise within agriculture and agribusiness. Created for a worldwide audience including specialists, students, consumers, buyers, scientists, industry leaders and government officials, this compendium provides a contemporary view of the island continent’s food provenance – in the largest sense of the word. With essays on agricultural history, economics, innovation and biosecurity and feature articles on a huge array of agri-related topics, Boundless Plains to Share encapsulates a nation’s accomplishments, debates, methods, expertise and much more. Its numerous authors range from leading scientists, such as current Chief Scientist Alan Finkel, Professor Lindsay Falvey, Dr Göran Roos and André Teixeira, to prominent thinkers including Australia’s greatest living historian Geoffrey Blainey, former President of the UN Security Council Kishore Mahbubani and former Victorian Premier John Brumby, as well as respected writers such as Don Watson, renowned biographer of Paul Keating and recent author of The Bush. Boundless Plains to Share offers many compelling stories, abundant facts and numerous opinions. It is an unparalleled source for anyone interested in Australia’s agriculture or agribusiness, and can be enjoyed as a reading and visual pleasure over time or used as driver for new ideas within this ever more dynamic sector. The book was also edited acknowledging the growing demand among students and teachers at secondary and tertiary levels for more knowledge on Australia’s vibrant agricultural industry. -2-

Australiaâ&#x20AC;&#x2122;s agribusiness partnership with Asia â&#x20AC;&#x201C; century 21

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Foreword:

griculture is at the core of any society that will prevail. It is a noble pursuit. It does not leave people diminished. It is the essence of what feeds and clothes them. As such, agriculture is not only a pillar of the economy as an economic imperative, but as a moral imperative too. So when any society undergoes a period of significant change, careful attention must be paid to the agricultural economy and its ability to sustain people and the environment. That is as true for the great nations of Asia as it is here in Australia. In Asia today, there are over four billion people and they are now making their way by the hundreds of millions into the middle class. This shift will demand dynamic change in agricultural markets to meet the requirements of growing populations and changing demographics. And it will revitalise the importance of twoway trade that underpins the economies of Australia – which prides itself on clean production systems and high biosecurity standard – and our trading partners across Asia. By 2050, world food demand is projected to rise 75 per cent, compared with 2007. In Asia, the growth is expected to be around 100 per cent. In the ASEAN member states vegetable and fruit consumption is projected to nearly double by 2050, with net imports increasing to US$8 billion in the region. By 2050, beef consumption in ASEAN member states is projected to be about 120 per cent higher than in 2007, with imports expected to expand by US$3 billion over this period. The ASEAN member states are also significant importers of dairy products. The real value of dairy consumption for ASEAN member states is projected to more than double by 2050. This consumption growth will be largely met by imports, which are projected to be US$6 billion higher in 2050 than 2007. In the midst of this change, we need to be very clear about where the real opportunities for Australia lie. Market growth in Asia does not mean that Australia will suddenly become the region’s

By The Hon. Barnaby Joyce MP, Minister for Agriculture and Member for New England.

‘food bowl’. I’ve said it before, and I’ll say it again: this is completely unrealistic. Firstly, much of the growth in demand across Asia will be met by productivity growth in the region itself. That is only right. Farmers are essential to the aspirations of every nation. And they must make money to continue in that role, no matter what part of the world they’re from. And secondly, the reality is that Australia currently produces only about 1 per cent of the agricultural product of the world. Our food exports are certainly growing – by 2019-20, the real value of farm exports is projected to be around 9 per cent higher than the average over the five years to 2013–14. At the very best, however, Australia currently feeds about 60 million people each year around the globe – including our own population of nearly 24 million people. Rather than feeding Asian countries, Australia’s opportunities in Asia will be based on trade that delivers the foundations for mutual prosperity. Agriculture, of course, will be at the heart of that trade. That is why this government has made a commitment to improving, and increasing, market access opportunities for Australian agricultural producers and industries. We have sent a clear signal – we are open for business. That’s good for our farmers. And it is good for our trading partners across Asia, and across the world. Since coming to government, we have concluded free trade agreements with China, Japan and Korea – the nations that are the largest, second largest and fifth largest importers of our agricultural commodities. These agreements emphasise two-way trade and opportunities for each nation. And they provide a clear opportunity for Asian markets to select the very best Australian food and produce to supplement local production. One of the many advantages for Australian agriculture in domestic and global markets is our

reputation as a supplier of clean, premium quality produce – a reputation that I believe is second to none. So our focus for export growth in Asia is on high-quality agricultural products and premium produce: that is where our future lies. But the real value of trade, like the value of agriculture itself, goes far beyond dollars and cents alone. Our international partnerships across Asia are also crucial to Australia’s agricultural competiveness and profitability in other ways. I am a firm believer in open discussion and sharing ideas, working hand-in-hand with our international and trading neighbours who have unique ideas of their own. Australia has a great deal to learn from Asia, and a wealth of knowledge and agricultural commodities to share in return. It gives me great pleasure to provide this Foreword to Boundless Plains to Share. I commend its ideals and its aims. The Australian Government places a high priority on our relationship with Asia and we are committed to building the best foundation for mutual success into the future.

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R O L L

O F

H O N O U R

GOLD SPONSORS: Queensland University of Technology The State of South Australia The State of New South Wales Baiada Poultry Murray-Darling Basin Authority Prime Super Simplot Australia Deakin University Breakout River Meats Australian Country Choice Goodman Fielder The Department of Industry, Innovation and Science SILVER SPONSORS: IBISWorld Food Innovation Australia Limited University of Technology Sydney Australian Agricultural Company Ruralco Holdings Limited Invest Canberra Bank of Queensland Australian Export Grains Innovation Centre Queensland Alliance for Agriculture and Food Innovation Dairy Australia CBRE Australia Pace Farm Australian Research Council DMG Fine Wine Beston Global Food Company Australian Made Campaign Limited Australian Veterinary Association Costa Group Sydney University Faculty of Veterinary Science University of Melbourne Central Queensland University Boehringer Ingelheim AgriBio, Centre for AgriBioscience Australian Organic Agricultural Business Research Institute PFD Food Services Australian Agricultural Investment Fund

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Innovate Agriculture Qantas Freight The Scots College Atlantic Oil Komatsu Australia Agricultural Appointments Lindsay Australia Symbio Laboratories The King’s School Bulla Dairy Queensland Agricultural Training Colleges

SELECTED LEADERS IN QUALITY AND INNOVATIVE FOOD AND PHARMACEUTICAL PRODUCTION: Preshafood Limited JBX Pty Ltd Maggie Beer Products Tucker’s Natural Noden’s Group Jeeerks Inside Out Nutritious Goods Nutrition Care Pharmaceuticals Australia Sarin Marine Farm Byron Bay Chilli Company Emma and Tom Foods Serendipity Ice Cream Organic Merchant Zea Relief Zerella Fresh Buzz Honey Nexba Naturally Brave B.-d. Farm Paris Creek Rainforest Foods Longridge Olives Annex Foods Fem21 Aqualove Water

Message from the CEO

There is an old saying amongst publishers and writers: “books are never really finished, merely abandoned.” True, for there are always many niggling little changes, perfections, additions and passages which might have been added or altered. Boundless Plains to Share offers a solution to this, thanks to our use of innovative technology. Through digital editions of our publication, as well as our many social media platforms and our websites in both English and Chinese, we are able – as a community – to provide a steady flow of quality information about Australia’s food, agricultural and agribusiness endeavours. You may notice this digital edition of Boundless Plains to Share has some changes and additions - thanks to digital technology, we have been able to update the book and can easily share and circulate pages or whole chapters of interest. Such material – whether a page, chapter or the entire book – can be targeted to specific audiences with reader statistics measured and opinions gained. The opportunities for appropriate dissemination are endless. To our knowledge, no other country has created a similar program. This fact displays the first objective of Boundless Plains to Share: to accurately document and display Australia’s great agribusiness provenance. Very few in the food industry would deny that an Australian provenance is a distinct advantage. Nor would they deny that competition is fierce in overseas markets, as well as domestically. It follows that a collective job of building on our provenance is beneficial, especially when an organisation can fully serve itself directly and assist the wider industry and the country at the same time. Fortunately, Australia has a lot to say. But as Mick Keogh, Executive Director of the Australian Farm Institute, notes: “we have many great stories to tell which are dynamic and compelling, and build our national brand. But we aren’t as good as telling these stories as we should be.” There are other fundamental purposes as well that will help the nation as a whole. We seek to advance our science and innovation, inspire our youth, urge collaborations, inform the masses on the origins of Australian food, advance our excellent universities, improve public health, attract appropriate investment, celebrate and benefit farmers, increase two way trade and promote individual brands. This is especially true when you consider Boundless Plains to Share is a transnational, multi-lingual effort that encourages the exchange of ideas. An exchange of this nature generally forms the basis of constructive relationships, of friendships and trust and of trade. The volume you are reading is but the kernel of a much larger planned effort we term a “knowledge campaign”, with no end date in mind. Any organisation engaged within the wider field of agribusiness can become involved. Whereas numerous reviewers have expressed keen approval of the pages here, this is only a debut – the start of a much wider, longer procession. So, please look at Boundless Plains to Share differently – as the beginning of an exciting journey to educate, engage, and inspire millions, not the end.

One Mandate Media Group Pty Ltd Audrey Murugasu - CEO Jim Eggleton - Publishing Director Keiron Costello - Managing Editor

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Contents

01/THE BIG QUESTIONS FOR AUSTRALIAN AGRIBUSINESS

14-15 16 17 18-19 20 21 22-23 24 25

ANDRE TEIXEIRA: HOW CAN AUSTRALIA BEST ADD VALUE? MICHAEL JEFFERY: WHAT CAN WE DO ABOUT AUSTRALIA’S SOILS? GÖRAN ROOS: WHAT IS AUSTRALIAN AGRICULTURE MISSING? PROFESSOR IAN CHUBB: CAN WE SECURE OUR FUTURE THROUGH SCIENTIFIC EDUCATION? JOHANNES ZHOU: HOW CAN AUSTRALIAN FOOD COMPANIES EXCEL IN CHINA? PETER CAI: WHAT ROLE DOES ASIA PLAY IN OUR FUTURE? MICK KEOGH: WHAT SHOULD AUSTRALIA DO ABOUT DROUGHT? PETER SCHUTZ: WHAT DOES INNOVATION LOOK LIKE? PHIL RUTHVEN: WHAT SHOULD A YOUNG FARMER DO?

02/ESSAYS 28-37 38-45 46-53 54-59 60-65 66-75 76-79 80-87 88-93 94-97

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KISHORE MAHBUBANI: AUSTRALIA AND THE GREAT CONVERGENCE DAVID THOMAS AND KATYA DOBINSON: AUSTRALIA IN THE ASIAN CENTURY PROFESSOR LINDSAY FALVEY: AGRISCIENCE TAMES AN ALIEN LAND MICK KEOGH: REVIVING AUSTRALIA’S EXPORT MARKETS GEOFFREY BLAINEY: A LAND HALF WON PHIL RUTHVEN: THE FUTURE OF AUSTRALIAN AGRICULTURE SIMON VILLE: FUNDING OUR FARMERS JIM PRATLEY AND CAMERON ARCHER: EDUCATION AND AGRICULTURE IN AUSTRALIA – A JOURNEY OF CONTRADICTION DON WATSON: THE BUSH WILL NOT LIE DOWN GRAEME PHILIPSON: THE VISION SPLENDID

03/WHAT ASIA WANTS 100-101 102-103 104-105 106-107 108 109 110 111

OVERVIEW BY ASITAVA SEN WHAT IS ASIA? THE VIEW FROM CHINA THE VIEW FROM JAPAN THE VIEW FROM KOREA THE VIEW FROM INDIA THE VIEW FROM INDONESIA THE VIEW FROM MALAYSIA

04/THE BUSINESS OF AUSTRALIAN AGRICULTURE 114-115 116-119 120-121 122-123 124-126 127 128 129 130-133 134-135 136-137 138 139 140-141 142 143

OVERVIEW BY JAN DAVIS PRIME INDUSTRY SUPER PERFORMANCE THE FUTURE OF FARMING WITH BOQ CBRE AND THE RISE OF THE AGRIBUSINESS ASSET CLASS THE SCIENCE IS SETTLED. GM FOOD IS SAFE INVESTING IN AGRICULTURE: OUR FUTURE A BRAND OF SUCCESS FEEDING THE BOOMING ORGANIC DEMAND SIMPLOT’S COOPERATIVE APPROACH TO COMPETITIVENESS RURALCO: LINKING CONSUMERS TO THE BEST AUSTRALIA HAS TO OFFER DOING THINGS DIFFERENTLY: THE HANDPICKED WAY FROM THE BAROSSA VALLEY WITH LOVE CLOSE TIES WITH LOCAL TOWN MAKES FOR GOOD BUSINESS SWEEPING PLAINS AND SCIENCE COMBINE TO MAKE AACO’S SUPERIOR BEEF PFD – AN AUSTRALIAN FAMILY FEEDING AUSTRALIAN FAMILIES PACE FARM: AN AUSTRALIAN FAMILY STORY

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05/FOCUS ON AUSTRALIA’S STATES AND REGIONS 146-147 148-149 150-153 154-155 156 157-159 160-161 162-165 166-168

OVERVIEW BY JOHN BRUMBY SOUTH AUSTRALIA AND SHANDONG: A MODEL RELATIONSHIP SOUTH AUSTRALIA: THE SIX-STAR FOOD AND WINE STATE AG SECTOR BRIMMING WITH INVESTMENT OPPORTUNITIES NEW SOUTH WALES – A LEADER IN AGRICULTURE AND FOOD PRODUCTION NEW SOUTH WALES: OPEN FOR BUSINESS CANBERRA: KNOWLEDGE CAPITAL OF AUSTRALIA THE RIVERS OF THE INLAND THE UNTAPPED POTENTIAL OF NORTHERN AUSTRALIA

06/INNOVATION IN AUSTRALIAN AGRIBUSINESS 172-173 174-175 176-180 181 182-183 184-187 188-189 190 191 192-193 194-195 196-197 198 199 200-201 202-203

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OVERVIEW BY GRAEME PHILIPSON FIAL – INNOVATION IN AUSTRALIA’S FOOD VALUE CHAIN A HISTORY OF INNOVATION IN BUSINESS, CHARITY AND RESEARCH PASSION AND EXPERTISE COMBINE TO GROW THE PERFECT BLUEBERRY THE INNOVATION POWER OF IDEAS HIGH POINTS OF AUSTRALIAN INNOVATION THE BEEF OF CHOICE FOR AUSTRALIA AND ASIA BREAKING NEW GROUND IN LIVESTOCK INFORMATION SERVICES ANGUS SUCCESS DRIVEN BY MARKET PREMIUMS AND PRODUCER INNOVATION PORK CRC – TRANSFORMING AN INDUSTRY AEGIC DRIVES AUSTRALIA’S GRAIN EXPORT FORWARD AUSTRALIAN TRUFFLES FOR THE GLOBAL DELICATESSEN WHEN THE PRESSURE IS ON INNOVATING IN THE SUPPLY CHAIN TO EXPORT THE BEST THE UNSUNG REFRIGERATION REVOLUTION USING DIGITAL MEDIA TO SUPPORT INNOVATION

07/INTERVIEWS WITH AGRIBUSINESS LEADERS 206-207 208-209 210-211 212-213 214-215

MARCUS BLACKMORE MARK ALLISON ANDREW HUNTER IAN BRIGHTHOPE TRAVIS DILLON

08/SCIENCE, TECHNOLOGY AND BIOSECURITY

218 219-221 222 223 224-225 226-227 228-230 231 232-233 234-235 236-239 240-241

OVERVIEW BY ALAN FINKEL THE NBN, ICT AND AUSTRALIAN AGRICULTURE SEE THE FUTURE WITH AGBOTS HOW HI-TECH IMAGING OF LIVESTOCK WORKS FROM PADDOCK TO PLATE AIMING TO BE A GLOBAL LEADER IN SUSTAINABILITY AGRICULTURE: HOW THE KEYBOARD REPLACED THE PLOUGH HIGH POINTS OF AUSTRALIAN SCIENTIFIC RESEARCH AGRIBIO: AN ENVIABLE RECORD IN SCIENTIFIC RESEARCH VALUE-ADDED FOODS: LEVERAGING AUSTRALIAN ATTRIBUTES WAGYU BEEF DRIVING AUSTRALIAN CATTLE INDUSTRY INTO GREENER PASTURES FUTURE TRENDS IN AUSTRALIAN BIOSECURITY THE REGULATIONS ENSURING AUSTRALIAN FOOD SAFETY

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09/AUSTRALIA’S EDUCATION SECTOR 244-245 246-255 256-259 260 261 262-263

HOW AUSTRALIA’S UNIVERSITIES TEACH AND RESEARCH AGRICULTURE AGRICULTURAL RESEARCH AND INNOVATION AT QUT AUSTRALIA’S REGIONAL AND RURAL FUTURE CUTTING EDGE AGRICULTURE RESEARCH IN THE CENTRE OF THE CITY INNOVATIVE TEACHING METHODS CREATING ENTREPRENEURS CQUNI LEADING THE WAY WITH NEW AG DEGREE

10/AUSTRALIA’S LEADERSHIP IN SOIL HEALTH

266-267 268-269 270-273 274-275

PROFILE OF MICHAEL JEFFERY, AUSTRALIA’S FIRST ADVOCATE FOR SOIL HEALTH RADICAL SOIL MANAGEMENT FOR AUSTRALIA: A REJUVENATION PROCESS THE GREAT SOILS DEBATE EFFICIENT SOIL MANAGEMENT A WIN-WIN FOR AGRIBUSINESS AND THE ENVIRONMENT

11/VETERINARY SCIENCE AND ITS CONTRIBUTIONS 278-280 281 282 283 284

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OVERVIEW BY KEVIN DOYLE AVA: PROVIDING VETERINARY LEADERSHIP IN AGRICULTURE AND BEYOND UNIVERSITY OF SYDNEY: LEADING THE WAY IN VET SCIENCE LOOKING AFTER ANIMALS IMPROVES PROFITABILITY VETERINARY SCIENCES AT JAMES COOK UNIVERSITY

12/PROVEN AND PREMIUM BRANDS OF AUSTRALIA 288-289 SPEAKING WITH ONE AUSTRALIAN VOICE: THE GREAT BRAND DEBATE 290-294 LEADING AUSTRALIAN BRANDS 295 PRESHAFRUIT 296 SERENDIPITY ICE CREAM 297 TUCKER’S NATURAL 298-299 BREAKOUT RIVER MEATS 300 INSIDE OUT NUTRITIOUS GOODS 301 MAGGIE BEER PRODUCTS 302 JEEERKS 303 BYRON BAY CHILLI COMPANY 304 EMMA & TOM’S 305 NODEN’S GROUP 306 BIO ISLAND 307 MAXIGENES 308 ZEA RELIEF 309 NUTRITION CARE 310 SARIN MARINE FARM 311 B.-D. FARM PARIS CREEK 312 PACE FARM 313 ORGANIC MERCHANT 314 NEXBA 315 LONGRIDGE OLIVES 316 BUZZ HONEY 317 ANNEX FOODS 318 ZERELLA FRESH 319 RAINFOREST FOODS

13/INSIDE THE AUSTRALIAN AGRICULTURAL INDUSTRY 322-325 326-337

AGRICULTURE AND AGRIBUSINESS – THE VALUE CHAIN GEOGRAPHIC DISTRIBUTION OF AUSTRALIAN AGRICULTURAL COMMODITIES

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The Big Questions for Australian Agribusiness Leading thinkers in agribusiness and agriculture tackle the challenges facing Australia now and in the future.

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01/THE BIG QUESTIONS FOR AUSTRALIAN AGRIBUSINESS

How can Australia best add value? Australia is one of the few countries in the world that can add value at every stage of the agricultural production process. What should we do with this expertise?

ustralia has massive potential as an agricultural provider, but the assumption that Australia is going to be the breadbasket of Asia is based on a fallacy. We simply do not have not enough arable land. Australia is a big country, but compared to other countries with a large land mass we have a lot of desert. This need not be a problem. By focusing too much on commodities we risk losing the opportunity to develop the technologies and the value add on everything that goes from the farm all the way to the table. It is not enough to be a commodity provider in the modern world. A country with Australia’s technological prowess can aim higher. It’s about quality rather than quantity, about exporting our skills, so that we export not just value added products, but expertise and knowledge. When we think about food we tend to think about farmland. But we should also think about the processing, logistics, distribution, retailing – the transformation of produce into food, all the way from paddock to plate. The objective of food science and technology has always been to make more food available to more people for a longer period at a lower cost. Anything that helps achieve those aims is a valid objective for export. For example, instead of being an exporter of oranges, it’s far more effective to become an exporter of orange concentrates or orange bases. Instead of exporting raw milk, export the base for making other kind of dairy products or milk protein concentrates. We need to derive our opportunities from the knowledge that exists in this country, in terms of food science and technology. Australia is in the forefront of food and agriculture R&D globally. There is a plentiful supply of raw materials for the food industry, coupled with high quality research centres. But there needs to be more interface between industry and academia. The academic world needs to be more practical, and the business world needs to be more knowledge-centric. Unfortunately Australia has been dropping off the pace. A lot of multina-

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tionals once had technology development centres in Australia as a vector into the Asia-Pacific area. But many of them have been abandoning Australia, relocating their R&D and manufacturing overseas. Kraft, Nestle, Procter & Gamble, Coca-Cola – all used to have R&D centres here. But now costs are too high, and the skills and competency gap with other countries has narrowed. Many are setting up their R&D facilities in China, not just for that country but for the whole of Asia. But it is risky doing technology development in China, where there is no such a thing as a secret. Doing technology development there is the same thing as giving away your technology. The numbers show how Australia is lagging in food technology R&D. The food and beverage industry in Australia accounts for approximately a quarter of the industrial output of Australia, and about a quarter of employment. But only about 12 per cent of industrial R&D investment in Australia is in the food industry. So there is a big gap between the size of the food industry, and how much money is going to R&D on that. Australia will have to decide in the very near future what it wants to be. It has the potential to be one of the food technology poles of the Asia-Pacific, because it’s one of the few countries that has enough knowledge and experience from the farm to the dining table. And not only that, the consumers here are a demographic laboratory of the world in many ways. Unlike other migrant countries, Australia is not a melting pot. Australia is like a salad bowl – you can see all the ingredients. Multiculturalism has many advantages. We have a chance to see how Asian habits evolve in terms of food, how they evolve in contact with Western society. Conversely, it’s easy to see how Western habits are evolving in contact with Asian influences. Australia needs to identify opportunities for coupling the technology that’s already available here – developed in a number of research centres and universities – with the availability of those raw materials, and then opportunities

for manufactured and semi-manufactured products will abound. There needs to be a joint effort between industry, government and the research agencies, and it has to be a multi-disciplinary approach for it to work. Australia’s greatest strength in food science and technology is that it has expertise at every step of the process. If you think of food you have to think about a number of disciplines, from basic soil chemistry and agricultural techniques all the way to the psychology and behaviour of consumers. There is not a single one of those areas of knowledge that you cannot find high level research in Australia, and this is a unique combination of factors. Very few countries are at the same kind of level, but unfortunately it is not exported well enough. Investment in R&D should be an integrated investment – investing in R&D in different silos in agriculture and the food industry, food distribution, logistics, biosecurity, waste, etc. Australia has not done this well. There have been a number of models. In the US model, the commercial interface of academia is almost a must in the technology field, but often to the point that the pristine nature of the academic research becomes details. The British model has been a little bit more balanced in the sense that they created around the universities a kind of a scientific interface with industry. Cambridge and Oxford formed this a number of years ago. And some other countries like France created what they call poles of knowledge around the universities. So if you had a strong university in chemistry, then they would create a number of chemical companies around that university with a pole. Germany has a different approach again – it’s through some of their research institutes where the research is channelled from the universities. They all have different models. Australia needs to find its own ethos. To capitalise on Australia’s strengths we need industry, universities and research centres to work together in what we might call a ‘collaborative innovation’ approach. There is no such thing as open innovation, because people have to pay for it in the end. But collaborative innovation, in which we define the mutual benefits upfront, can create an environment where academia can profit from the connection with the industry – for the practical application for some of their developments – and industry can access their enormous amount of knowledge. It’s good for both sides. Researchers become more practical, the universities graduate people who are more adaptable to industrial reality, and industry can access their knowledge base in a much better way. We have the brains here, the knowledge, fantastic universities and research centres. It’s a territory where every single discipline in the book can be covered, from food law to psychology, from the anthropology of food habits to the bio-

chemistry of fermentation, from food engineering to processing – you name it. Every food type is grown and manufactured in Australia, and everything related to food can be covered by one branch of science or the other: medicine, nutrition, dietetics, epidemiology, everything – food habits, anthropology, sociology, biochemistry, chemical engineering. Very few countries can claim such a versatility. You can eat anything from the four seasons of the Northern Hemisphere, you can eat here any time, and that’s an incredible base. Australia has one of the best food science and technology infrastructures in the world. Our challenge is to use it properly.

THE LESSON: Australian agribusiness needs to concentrate on quality, not quantity, and invest in R&D to develop unique strengths.

“To build a strong and sustainable Australian agrifood industry, it must also be commercially competitive on global markets. Although we export most of what we produce, we are a high cost country which must differentiate to compete. Australia takes many of its agri-food assets for granted and some of these costs can be improved upon.” Claudine Ogilvie, Chief Information Officer, Ridley

ABOUT THE AUTHOR: Dr. André Teixeira is General Manager, Innovation at Bundaberg Brewed Drinks in Australia, and was Entrepreneur in Residence at CSIRO during 2015-16. He is Executive Professor of Innovation at the Antwerp Management School at the University of Antwerp in Belgium and the Lorange Institute of Business, Switzerland. He is a Partner at Keiryo, a technology start-up in Luxembourg, and a member of the boards of Globalpraxis (a consulting firm in Barcelona, Spain) and Wine With Spirit (an innovative wine business in Portugal). He has had a truly global career, having worked on six continents including twenty-three years at Coca-Cola, where his last post was President for Russia, Ukraine and Belarus after senior positions in R&D, Operations and General Management. He was also with Interbrew, Campbell’s and Goodman Fielder as head of Innovation, R&D and other capacities. He is the creator of an ideation methodology used world-wide and a management and leadership programme based on the Classics. He has graduate and postgraduate degrees in Philosophy, Industrial Chemistry, Food Science and Business, from Cambridge, Reading and Oxford Universities. He is an amateur writer and is a guest speaker in conferences the world over. Having lived in seventeen countries, he speaks ten languages and lives in Sydney with his family.

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01/THE BIG QUESTIONS FOR AUSTRALIAN AGRIBUSINESS

What can we do about Australia’s soil? Ultimately, everything comes from the soil. But Australia’s soil is degrading. Action is needed now.

have a simple fundamental view – to save the planet we have to save the soil. By 2050 Australia will have to almost double its food production as the world’s population grows from 7 billion to maybe 10 billion. We have to do it at a time when the world is losing agricultural land at 1 per cent a year from urbanisation, aridification and other causes. We have to do it where we are using water at unsustainable rates, for irrigation in particular. We have to do it when the prices of fossil fuels and fertilisers are increasing. Many factors are improving our capacity to feed the earth’s increased population. We are making great advances in technology and in our capacity to redistribute food, and we can prolong the life of food through better storage and better transportation. But there is a single fundamental upon which all these things hang. That is soil. Australia’s soil is degrading. We have not treated it well. We need a total re-evaluation of what we want to do with the Australian landscape. There are three key components: n the soil itself, and the fungal and microbiological activity that goes on beneath it (which we don’t hear much about). n hydrology – the availability of water and how it is retained in the soil. n what we grow in the soil. The key ingredient for success in restoring and utilising those assets is to manage them as an integrated trio. For too long we have been looking at individual aspects, like water, in isolation. Those three components managed properly are very important. They should be declared as key national natural strategic assets, to be managed in an integrated way.

Who is looking after the Australian landscape? Aboriginal people have done it for thousands of years, and now it is our 130,000 farmers and graziers who manage more than 60 per cent of it. That means we have to do something about how we support them. That can be done in two ways – to pay them a fair price for their product, and to reward them as the primary carers of our agricultural landscape. So how do we get better public support for our farmers if they are the primary carers? We need to reconnect urban Australia with its rural roots, perhaps through a garden in every school. We also need to look at the role of science. While we have many very good scientists in Australia, science itself is underfunded and uncoordinated. We haven’t even done a stocktake of our knowledge base in respect of soil science. That needs to be done, so we can get an idea of our key deficiencies in soil science. We need to define what we mean by a healthy soil, and then how we measure it. Maybe it is carbon content, maybe it includes other factors. Once we have determined the metrics we can then, through case studies, measure the outcomes of the various inputs farmers are making – natural inputs, organic inputs, time inputs, water inputs. Over time we will then get an accurate assessment of what works and what doesn’t work, and give clear and unequivocal advice to farmers to make their own decisions to improve their own patch – and Australia. Then we can design and carry out a formal research program, in which CSIRO and relevant universities can develop appropriate policies.

THE LESSON: Australia needs a national soil strategy, developed from the basics.

ABOUT THE AUTHOR: Major General the Honourable Michael Jeffery AC, AO (Mil), CVO, MC (Retd) was Governor-General of Australia from 2003 to 2008 and is Australia’s first Advocate for Soil Health and Patron of Boundless Plains to Share. His role is to raise public awareness of the critical role soil plays in underpinning sustainable productivity and to give soil science advice to government. He had a distinguished military career, seeing action in Malaya, Borneo and Vietnam, where he was awarded the Military Cross and South Vietnamese Cross of Gallantry. He commanded Australia’s elite Special Air Service Regiment, became Deputy Chief of the General Staff in 1990 before retiring from the army in 1993. He was the first Australian soldier to be appointed Governor-General, after earlier serving for seven years as Governor of Western Australia. He has also served as Australia’s Chief Scout, and was founder and inaugural chairman of Future Directions International, a not-for-profit research institute which publishes research on important issues facing Australia.

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01/THE BIG QUESTIONS FOR AUSTRALIAN AGRIBUSINESS

What is Australian agriculture not doing well? There are three things Australian agriculture is not doing well that it could easily fix, because they are more questions of attitude, rather than practice.

o set things right we don’t have to actually do too much – it involves a change in our way of thinking, rather than in what we do. Think differently, and we will do things differently.

such as farms. Take milk prices as an example. If milk prices are highly variable, the farmer’s behaviour will be short-term, because he doesn’t know what will happen next.

COMMODITY VERSUS VALUE-ADD The first is that we think of Australia as having a commodity focus instead of a value-add focus – that is especially true of agriculture. But if we continue in this way, then the boom in demand in Asia will impact the Australian economy only marginally, because the value-add will be done somewhere else. The economic benefit will accrue there, rather than here. The phrase ‘value add’ says it all. We need to think about how we can add value. This a problem in other industries as well – it’s how we deal with our endowment resources, such as minerals.

UNDERSTANDING THE ENVIRONMENT From short-termism comes the next problem. We don’t appreciate the general environment in which we work. In agriculture, that comes back to the soil. ‘How long will my topsoil last? What will happen if I don’t do anything about it? How will I deal with it?’ Whether you run a farm or a manufacturing company it is the same. If you run a farm you need to continuously invest in equipment to make sure your productive areas remain that way. There is a bit of a hunter-gatherer culture in Australian agriculture. In other words, I explore, I find something, I use it for as long as I can, then when I use it up I move somewhere else. There is a difference between what you might call a grain farmer attitude and a forest farmer attitude. If you are a grain farmer you plant this year what you are going to harvest this year. You only think about yourself. If you are a forest farmer you harvest what your grandfather planted and you will plant what your grandchildren will harvest. That means your mindset is that you do things for others. That then penetrates into the way you look at your economic activities, be it a farm or a factory. Do you extract as much as possible for yourself, or do you work to leave the entity in a better shape than you found it?

A LONG TERM PERSPECTIVE The second issue is that we often don’t have a long term perspective, particularly in some domains. Ten years is short term when you are talking about mining. But too many people in Australian agriculture do not think far enough ahead. This is partially the fault of government, whose role it is to provide civic leadership. Government should provide a clarity of direction that does not change. That is extremely important, because for people to make investments they need certainty. Without certainty, decisions are often delayed or not made at all. Short-term thinking at the policy level leads to short-term thinking at the enterprise level, because businesses have learnt to live in a short-term environment. You get a behavioural pattern where people frequently extract short-term profit at the expense of long-term profit. The issue is not just with big companies, it is with smaller companies –

THE LESSON: Think differently about key issues – value-add vs commodity, long-term vs short-term, caring for the environment.

ABOUT THE AUTHOR: Göran Roos is Chair of the Value Add and Industry Growth Sub-Committee of the Economic Development Board in Adelaide. He is a member of the Council for Flinders University and a Stretton Fellow appointed by the City of Playford at University of Adelaide, Adjunct Professor at ECIC, University of Adelaide, Adjunct Professor at University of Technology Sydney Business School, and Adjunct Associate Professor in the College of Business at Nanyang Technological University in Singapore. He is a fellow of the Australian Academy of Technological Sciences and Engineering (ATSE). He is recognised as one of the founders of modern intellectual capital science and is a recognised world expert in this field as well as a major contributor to thinking and practice in the areas of strategy and innovation management as well as industrial and innovation policy.

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01/THE BIG QUESTIONS FOR AUSTRALIAN AGRIBUSINESS

Can we secure our future through scientific education? Students in developed countries are losing interest in science as a career path. This attitude has to change to ensure a competitive future.

few years ago the European Union asked 15-year-olds across the world whether they were interested in becoming scientists. More than 80 per cent of the students in Uganda, Ghana and Swaziland said yes. More than 70 per cent of the students in Sweden, Denmark and Norway said no. The EU concluded the more developed the country, the less likely were its children to want science careers. The trend is not new, nor is it confined to the young. At the height of the Cold War, when the Space Race was in full flight, writer and scientist C.P. Snow observed society’s ignorance of the science that put the rockets in the sky. “So the great edifice of modern physics goes up, and the majority of the cleverest people in the western world have about as much insight into it as their Neolithic ancestors would have had,” he wrote. It may seem strange that the societies which derive the most benefit from science and technology find it so challenging to interest their people in studying it. Then again, when all the good things seem to come to you on tap, perhaps you never see the need to inquire too deeply into their sources. If we did, we might recognise that the science ‘tap’ is connected to a pipeline: a pipeline that begins in schools, where our attitudes are shaped and our life choices narrowed or expanded. We would see that the pipeline flows into every industry and every sphere of our lives – because science is the wellspring of whatever opportunities we can create for ourselves in the decades to come. And so we would demand much more of our education system than the capacity to produce a small scientific elite. We would call for the highest degree of science literacy across the board. We would think of science degrees not as specialist streams, but as ways we learn to analyse, investigate and create. We would make science education a national priority. What would we see if we held up our education system to that test? We would see that participation in science and mathematics at senior years in schools is at a 20-year low; that in NSW twice as many students are enrolled in elementary as in intermediate maths; that our school performance

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as measured in NAPLAN is stagnant; and as measured in the international rankings is in long-term decline. We might be surprised that a student can drop out of every mathematics stream – elementary, intermediate and advanced – and still enrol in a science degree in no fewer than 11 of our universities. We might question why it is that just one in seven university students in the natural and physical sciences participates in any sort of industry placement or project as part of their training; three in 100 get a placement of at least three months’ duration; and few of those placements provide exposure to start-ups and entrepreneurs. In an age defined by its enthusiasm for innovation, why should our expectations be so deflated in education? In one sense, the changes we need are not difficult to see: the experience of other nations confirms that students learn best from teachers who are confident in their subjects, recognised as professionals, and equipped to keep their knowledge up to date. Science, in particular, benefits from hands-on, inquiry-based learning that engages students in real-world problems and shows them the relevance of science to everything we do. Likewise, students should expect an education that allows them to look down the pipeline to possible careers, not just through the content taught but through the role models encountered, the networks formed, the attitudes shaped. The challenge is to achieve that kind of education for every student, not just the lucky few or the high achievers. It will take ambition. It will require the capacity for business, government agencies and education providers to cooperate, not just in forums but as a habit of mind. It will demand from all of us a change in attitude towards science and those who teach it. But we ought to remember that the only plains that are truly boundless are those of the mind; and its only fences are those we choose to make for ourselves. Let’s find the courage to overcome them.

THE LESSON: Australia needs to shift its attitude towards science and make scientific education a national priority.

ABOUT THE AUTHOR: Professor Ian Chubb AC is Australia’s immediate past Chief Scientist, serving in that role from 2011 until his term ended in early 2016. Educated at Oxford University, Professor Chubb is a neuroscientist and academic with a long history of significant appointments in the education sector. Previously Vice-Chancellor of the Australian National University and Flinders University, he is also a former president of the Australian Vice-Chancellors’ Committee and chairman of the Group of Eight university lobby group. He has long been a prominent campaigner for raising the profile of scientific education in Australia, and in 2006 he was appointed a Companion of the Order of Australia for service to higher education. Further recognition for his three decades of service to tertiary education and university governance came when he was named the Australian Capital Territory’s Australian of the Year 2011.

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01/THE BIG QUESTIONS FOR AUSTRALIAN AGRIBUSINESS

How can Australian food companies excel in China? There are great opportunities for Australian food processors and manufacturers to target the Chinese consumer, but predicting patterns in demand can be challenging.

hina’s demand for imported food and beverages has been on the rise for decades, propelled by the middle class’ pursuit of luxury and a lack of quality suppliers. When it comes to products from Australia and New Zealand, China is a major importer in many segments of the food industry. It is not uncommon for high-end restaurants in Beijing or Shanghai to have beef and lobsters from Australia or lamb from New Zealand flown in fresh in the morning to be served on the dinner menu the same day. Neither the economic slowdown nor the anti-corruption campaign has had a significant impact on the Chinese middle-class’ appetite for foreign food. Wealth is still being accumulated and income distribution is getting more uneven. The wealthy in China can afford their indulgences and they are putting their money where their mouth is – literally. Then there is the issue of trust. It is true that the Chinese government has cracked down hard on food quality. Large-scale, high-profile cases of food poisoning – such as the 2008 baby milk scandal which left six infants dead and thousands more with health issues due to tainted milk – have been scarce in recent years. Regulations and reinforcement have improved and corrupt officials held responsible. While few deny that food quality has improved significantly in recent years, public trust takes a long time to be restored. So profound is public mistrust of certain sectors of the food industry in China (in particular baby formula) that urbanites continue to buy baby food from Australia, New Zealand, Germany, the Netherlands and the United States, even though the speculative zeal has abated. 2014 saw the last tourist sentenced to prison in Hong Kong for attempting to carry baby formula above the legal limit (two cans per person) across the border – a criminal offence in the SAR. Nowadays much of the food importation takes place online, saving consumers money and sparing them of legal hassles – and also benefiting online store owners such as Jessica Rudd (the daughter of former Prime Minister Kevin Rudd), whose online baby formula business is a runaway success in China.

The debate in China is no longer about food safety, because with more stringent regulation, better enforcement and application of the most contemporary technology, China’s food quality is decidedly on a steep improvement curve. It will take time for the dust to settle. But as Western companies that invested a great deal of capital in powdered milk have learned, there can be too much of a good thing. The new debate is instead on genetically modified foods. The government has made clear its official policy on GM foods: that is, it is safe for consumption. China’s doors are wide open when it comes to genetically altered commodities such as soybeans and corn, as well as processed foods using them as raw materials. But many scientists remain sceptical. A well-known TV talk show host is launching a public campaign, using his own resources, to try and convince the nation that the official policy is wrong. This is rare in China. It shows the debate is far from settled, even though in the next few years – or even decades – Western countries will continue to sell GM foods in China uninhibited. All things considered, the best days are ahead for Australian food producers and foreign food producers in general. Chinese consumers are continuing to discover new foreign foods that they like and are willing to pay a premium to obtain them. And yes, Australian food producers are facing stiff competition as well. Thanks to WeChat and similar social networking platforms and online shopping networks, Chinese consumers are growing more informed about foreign food. Rumours about a food item can go viral in a matter of seconds and translate into sales increases in a matter of hours, be it pig’s feet from UK, sea cucumbers from the US, Kobe beef from Japan or of course pretty much all the bountiful yields of the well-endowed land and sea of Australia.

THE LESSON: Australian food companies looking for an edge in China need to focus on premium products rather than capitalising on short-term demand.

ABOUT THE AUTHOR: Johannes Zhou served as Chief Strategic Officer of China Investment Corporation, the nation’s sovereign wealth fund, until July 2016. This article is based on a keynote speech he delivered at the Agri Investor Australia Forum 2016 in Sydney.

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01/THE BIG QUESTIONS FOR AUSTRALIAN AGRIBUSINESS

What role will Asia play in our future? Australia has often been touted as the potential food bowl of Asia. The notion of developing Australia’s agricultural sector into a thriving business to replace the distressed mining industry is certainly an attractive idea. With large tracts of land, water and sunshine across its northern states, Australia seems to be naturally endowed to realise that vision.

owever, we need a bit of a reality check. The truth is that we are currently producing enough food to feed 60 million people – the figure is slightly dated but it is a commonly accepted figure – meaning we can feed about one per cent of the world’s population or two per cent of Asia’s. To give some perspective, we can only feed the population of Beijing and Shanghai. There is a long way to go before we can reach the cherished goal of being the food bowl of Asia. The real question is how scalable is Australia’s agricultural production? This important question has been addressed by a number of reports. The Australian Bureau of Agricultural and Resource Economics and Sciences published a report in 2012, suggesting the value of food exports could increase by 140 per cent by 2050, based on 2007 figures. The Australian Labor Party’s National Food Plan of 2012 also argued that the country’s food production could be increased by 30 per cent by 2050. Within the same time frame, the plan predicted the value of Australian agricultural export could be three per cent of total global food production. Even when we accept the most optimistic forecasts and assumptions, it seems Australia is only expected to play a relatively minor role on a global scale. Unlike the mining industry, it seems that the country cannot rely on bulk commodities business model to maximise the potential of the agricultural sector. The industry is not and will not be in a position to feed the rapidly growing population of Asia. By 2050, the middle class population will be about 3 billion and China will account for about one third of that. As put aptly by Deputy Prime Minister Barnaby Joyce, “We feed right now

… about 60 million people. If we doubled our production and fed 120 million people, we couldn’t even feed half of Indonesia, so let’s stop talking about how we’re going to feed the whole of Southeast Asia.” In addition, it is important not to overlook the fact that most Asian governments want to ensure a degree of food sufficiency and government subsidies as well as protect their own farmers from exporters like Australia and Canada. One official from Guangxi in China, a major sugar-producing province, told me that there was no way they would allow Beijing to cut sugar tariffs, because the province needs to look after 20 million canegrowers. The only sensible strategy for the agricultural sector short of some revolutionary change in production and technology will have to be centred on exporting premium quality Australian food to the rising upper-middle class Asian families, not the much-touted middle class. The Asian middle class will not pay $9 per litre for air-freighted fresh milk or $150 per kilo for purebred Wagyu beef; the wealthy upper middle class might. It is questionable whether middle class Australians could afford quality food at such a price range, let alone the less wealthy Asian middle class. Through better marketing, branding and distribution, Australian farmers can do well in an increasingly affluent Asia, but it is unrealistic to expect this country to feed the whole continent’s burgeoning population.

THE LESSON: Australian farmers need to focus their attention on the more affluent segment of Asia to maximise the potential of their products.

ABOUT THE AUTHOR: Peter Cai was formerly a research fellow at the Lowy Institute for International Policy. He is also a journalist who has written on the topic of China’s political economy for the Business Spectator and The Australian, as well as covered Asian affairs and telecommunications for The Age and the Sydney Morning Herald. Prior to becoming a journalist, Peter worked at the Australian Treasury as secretariat of the Foreign Investment Review Board, focusing largely on state-owned enterprises and sovereign wealth fund investment and trade policy issues. Peter has a master’s degree from Oxford University and holds undergraduate degrees in international studies and Asian history from Adelaide University.

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01/THE BIG QUESTIONS FOR AUSTRALIAN AGRIBUSINESS

What should Australia do about drought? Droughts are a natural part of the Australian landscape. Farmers and policy makers needs to accept this fact.

f all the issues that have vexed Australian agriculture over the past hundred years, the most controversial and most persistent is what to do about drought. There have been some backward steps, but policy reforms are now resulting in better outcomes. Despite their frequency, droughts have long been regarded as abnormal events in Australia. The earliest government responses were to attempt to droughtproof the nation through dams and irrigation systems, and to provide financial support to drought-affected farmers.

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Droughts were treated as natural disasters, like floods and fires, with the cost borne by taxpayers. It didnâ&#x20AC;&#x2122;t take long for state politicians and farmers to realise that declaring a region to be in drought triggered funding from the Australian government. That needed to change. A review in 1989 found that government drought subsidies removed the incentive for farmers to better prepare for drought. This led to the introduction of new policies designed to: n encourage primary producers to adopt self-reliant approaches to

managing their businesses for climate variability n protect Australia’s agricultural and environmental resources during periods of climatic stress n facilitate the early recovery of agricultural and rural industries, consistent with sustainable long-term levels. Measures to achieve these objectives included farm household support payments and interest rate subsidies, both of which were triggered by the declaration of a drought to be an ‘exceptional circumstance’. These changes led to questions about the merits of policies such as interest rate subsidies, questions exacerbated by the experiences of the millennium drought from 2003 to 2010. Some regions of Australia experienced an ‘exceptional circumstances’ drought for ten years or more, with many farmers accessing drought support repeatedly with no evidence they were becoming more self-reliant. An intergovernmental agreement on drought policy reform in April 2013 recommended the cessation of drought declarations, a broadening of the availability of farm household welfare support, the removal of farm business support measures, and a focus on training and support to improve farmers’ business management skills and drought preparedness. Despite the agreement, in the run up to the 2013 election the Australian government implemented a new drought support measure (contrary to the intergovernmental agreement) in the form of a concessional farm finance scheme, with the finance available even in states where drought was not occurring. There are a number of lessons arising from the recent developments in drought policy in Australia. The first is that enduring drought policy is necessarily a compromise between what is economically ideal and what is politically acceptable. Economists can develop sound policies based on the need to send the right messages about appropriate risk management and drought preparation, but there is an innate tendency for politicians to respond to drought by ‘doing something’ – even when it is largely ineffectual. Some farmers and politicians engage in mutually beneficial behaviour in response to drought. They both know that if farmers make enough noise then politicians will act. Drought policy that ignores this reality is unlikely to succeed. A second key lesson arising from changes in farm demographics is that industry-wide policy responses are often ineffective, due to the increasing diversity of farm businesses. There is no such thing as an ‘average farmer’, meaning it is very difficult to develop drought support measures that treat all farmers equally. A third key lesson is that farms are different to other businesses. Their level of revenue volatility and risk is much higher than that experienced by most businesses in other sectors of the economy. That means that major drought events in Australia will result in severe industry and regional disruptions, with the potential to impose significant costs on the community. Given these lessons and the many and varied twists and turns that have

occurred along the drought policy reform road, how adequate are current drought policies? The 2013 decision to cease drought declarations and to stop interest rate subsidies has attracted criticism, but even during the extended millennium drought 70 per cent of broadacre and dairy farms in drought areas received no assistance. Many believe that interest rate subsidies have rewarded inefficient farmers or those carrying too much debt, and penalised those who prepared adequately for drought. It has also generally not been available to farmers in the intensive livestock and horticulture sub-sectors, despite the fact that these constitute almost 20 per cent of all farm businesses. Many of these drought support measures sent perverse messages about the need for drought preparedness. They also often had a hidden cost in that they discouraged the development of commercial risk management options such as multi-peril insurance products, which are an efficient alternative approach to in-drought support. These multi-peril insurance products take a number of forms, with some based on defined meteorological events, and others based on realised farm income. They are commonly available internationally, usually with premiums heavily subsidised by governments. They allow farmers to select and pay for the level of risk they are prepared to be exposed to. Many question whether such products will ever gain wide acceptance in Australia. They certainly offer much more flexible and personalised drought risk management options for farmers than will ever be achieved by a blanket government payment program, with all the accompanying eligibility criteria and policy changes. There is potential for government to provide greater incentives for farmers to take up these policies, through measures such as enhanced tax deductibility. This would help to reduce the cost, while ensuring commercial providers remain competitive and tailor products to meet the different needs of the various sub-sectors of agriculture. It should also be close to revenue neutral for government, as any insurance payouts would be taxable income, in times when recipients would otherwise be unlikely to pay tax. Reform will not work unless it is widely communicated to farmers and their advisors and financiers. After the intergovernmental agreement of 2013, the government made little attempt to explain the changes or the rationale for them. Several state governments then pretended they knew nothing about the agreement as soon as drought conditions emerged. Unless the farm sector is fully engaged in future drought policy reforms, this will happen again in the future.

THE LESSON: Australia needs to treat drought as a regular occurrence rather than a natural disaster, and modify farming behaviours and policies accordingly.

ABOUT THE AUTHOR: Mick Keogh is Executive Director of the Australian Farm Institute, an independent policy research institute that conducts research into strategic policy issues of importance to Australian agriculture. In 2011 he was appointed to chair the Australian government’s panel to review drought support measures, the outcome of which was a fundamental change in Australian drought policy. Since 2012 he has also been chairman of the National Rural Advisory Council (NRAC), a statutory body which provides advice to the Minister for Agriculture, Fisheries and Forestry. He is also a member of the CSIRO Sustainable Agriculture Flagship Advisory Committee.

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01/THE BIG QUESTIONS FOR AUSTRALIAN AGRIBUSINESS

What does innovation look like? How do we do it? Australian agriculture and agribusiness is constantly being told it needs to innovate. What does that actually mean in practice, asks P E T ER SCHU T Z.

nnovation has become a fashionable word in Australia in recent years. In December 2015 the Australian government announced a National Innovation and Science Agenda (NISA), and individuals and organisations in all industry sectors are being urged to become more innovative. But was does this mean? And, in the case of the agriculture and agribusiness sector, how does it translate into action? One of the six Industry Growth Centres established in 2013 is Food and Agribusiness and it is now working under the NISA framework. Food Innovation Australia Ltd (FIAL) – an independent company with an industry-led board – is responsible for managing this Growth Centre. FIAL is looking to promote innovation at all stages of the food cycle – from paddock to plate – but it is not enough to innovate in just one area. Innovation, to be truly effective, needs to take place across the supply chain. This means the Australian food and agribusiness industry needs to work collaboratively. We need all components of the industry – farmers, the business community, food processors, governments and the wider supply chain – to all work together. Australian agriculture has largely lacked this culture of collaboration, and that is impacting our readiness for engagement with the huge market potential of the emerging Asian middle class. There is still a lot of xenophobia in Australia, but we need these foreign markets to invest in the Australian food and agribusiness sector because they will guarantee us markets. The Australian food and agribusiness industry is a very important contributor to the Australian economy. The food and beverage, grocery manufacturing and fresh produce industry represents nearly one third of the total Australian manufacturing industry by turnover. With the growing issues of food security, availability of arable land, changing diets of the developing countries and the nutrition demands of the emerging middle class in Asia, Australia is ideally positioned to provide

solutions to these challenges and opportunities. But too many farmers, graziers and companies further down the food chain are thinking and acting as they did in the past. Most farms are still family farms, but in a competitive global economy they need to be run as competitive businesses. The same is true of food processing and manufacturing – global pressures are changing the industry and those that do not adapt will not succeed. We have seen the results of this already. It is no good complaining about the changes – we need to embrace them. Through Australia’s established food manufacturing infrastructure and footprint, businesses and other industry stakeholders have the opportunity to transform and add value to our vast agricultural resources and provide economic benefit to all stakeholders in the entire value chain. But to do this they need to pull together – we need a coalition of the willing. The signs are promising. The National Innovation and Science Agenda is particularly strong on promoting collaboration and networking. This is fundamental in developing the food and agribusiness strategy that FIAL is building, to develop innovation policies and strategies for the industry. But we cannot do it alone. Everybody in the industry needs to adopt a mindset of cooperation and collaboration, with other parties within the industry, outside the industry and outside of Australia. The future success of agribusiness in Australia is as part of the global ecosystem, which means many preconceived notions need to be discarded. Ultimately, innovation is a mindset, rather than a practice. If we can all start thinking differently, then acting differently will follow. And that is what we need.

THE LESSON: Innovation needs collaboration, and a willingness to do things differently.

ABOUT THE AUTHOR: Peter Schutz is Chairman of Food Innovation Australia Ltd (FIAL), which was founded in 2013 under the Australian government’s Industry and Innovation Initiative. Mr Schutz also serves as Co-Chair on the CSIRO Agriculture & Food Advisory Committee, as Chair and President of the Australian Institute of Food Science and Technology, and serves on the boards of Lupin Foods Pty Ltd, Fermentation Tasmania Pty Ltd and GLNC Ltd. From 2000 to 2011 he was Group Technical Director for George Weston Foods and CEO of George Weston Technologies. He has also worked for Meadow Lea, Serrol Ingredients, Quality Bakers, Good Food Products, and NSW Egg Corporation. He started his career as a master brewer at Tooth and Company, where he spent 11 years. He has an honours degree in biochemistry and microbiology from the University of Sydney, a degree in wine science from Charles Sturt University and is a Fellow of AIFST and AICD.

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01/THE BIG QUESTIONS FOR AUSTRALIAN AGRIBUSINESS

What advice would you give to a young farmer? Australian agriculture is changing. Like this young farmer, it needs to make a miraculous conversion.

t was the early 1990s. I got a call on my intercom: “I have a farmer on the line from Western Australia. He’s really angry and wants to have a piece of you. Do you want me to tell him you’re interstate?” “No,” I said, “put him through.” “Are you the bloody galah that has written all this crap about us farmers?” was his opening comment. I had done a telephone interview with the West Australian newspaper some weeks before, about how farmers could make much better returns by running their businesses a different way: leasing a much bigger property rather than owning a small one, outsourcing ground preparation and harvesting, and more. Clearly, the article based on my comments had come out that morning. Hence the call. I asked the irate farmer on the line what his problem was. It turned out that, at 27 years of age, he had inherited his father’s property the previous year. His dad had died – too young at 53 – and partly as a result of that the farm was struggling. It was heavily in debt, with a net value of around only $175,000, and facing depressed prices for wheat and wool. “What would you do?” he asked. “Sell it,” I said. “But I still want to be a farmer,” he replied. “I’m not suggesting you shouldn’t be,” I said. “But hunt around for a decent sized property, say 10,000 acres. There will be an old farmer somewhere whose children don’t want to stay on the land. But he doesn’t want to give it up, and he will lease it cheaply to you.

“Don’t own or lease any equipment except a mobile phone and PC. Outsource everything else, and insure yourself against any failure of a subcontractor to turn up for spraying, harvesting and other critical stuff.” The next call came six years later. My secretary said “I have a guy on the phone from Western Australia who said he is a friend of yours.” I didn’t know I had any that far away, but I said to put him through. “It’s me again,” said the voice on the phone, as if he had just been chatting to me earlier that day. “I’ll need more help than that,” I said. Then I remembered who he was. “I’ve got a problem,” he said, which sent a chill up my spine. “I took your advice almost to the letter, and also the prices of wool and wheat have gone up a lot.” “So what’s the problem?” I asked. “Well, my accountant has rung me up this morning. He says I am worth $3 million. Now what the bloody hell do I do?” I should have said, “pay me a commission and I’ll keep talking!” But I didn’t. I just congratulated him. He deserved it, having effected the turnaround. Then I gave him some more advice. I suggested he now had enough money to buy a debt-free property if he really felt the urge to own something. But if he wanted to keep making a lot of money then he should keep doing what he has been for the last six years.

THE LESSON: Australia needs to treat farming more like a business, with modern business practices.

ABOUT THE AUTHOR: Phil Ruthven AM is chairman of IBISWorld, an online business information and forecasting firm, specialising in industry, market, procurement and business environment information. He started the business in 1971 and it now operates in the USA, Canada, the UK, China, Indonesia and Australia, with other countries planned in the future. He is a keynote speaker at congresses, conventions and seminars; and has done so for 40 years. He writes for a national newspaper, business magazines and online websites. He is an adjunct professor at the UTS, an advisory board member of the ANU Business College, and a past board member of CEDA, the Melbourne Institute and various charities. Phil is noted as a long range forecaster in areas of economics, social trends, political directions and world affairs. He was awarded an Order of Australia honour in 2014 for his contribution to business and the community.

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Essays A series of in-depth contributions examining the opportunities for Australian agriculture and agribusiness, and the conditions that built the industry into the powerhouse it is today.

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02/ESSAYS

Australia and the great convergence A number of important trends are ensuring that the world is becoming more prosperous and safer than ever before. KIS HOR E M A HB U B ANI explains how this means that the world is entering an era of closer cooperation and interdependence.

he world has experienced greater change in the past thirty years than it did in the previous three hundred. This is because of what many people are calling the ‘Great Convergence’. The world is coming together. This is about more than globalisation – billions of people are joining the middle class, giving them greater spending power than ever before. The world is entering an era of shared values and shared aspirations. The term was first used in an influential 2011 lecture by Financial Times chief economics commentator Martin Wolf, entitled ‘In the Grip of a Great Convergence’. “Convergent incomes and divergent growth – that is the economic story of our times. We are witnessing the reversal of the 19th and early 20th century era of divergent incomes. In that epoch, the peoples of Western Europe and their most successful former colonies achieved a huge economic advantage over the rest of humanity. Now it is being reversed more quickly than it emerged. This is inevitable and desirable.” This trend has important consequences for Australia, Asia and the whole world. In terms of Australian agriculture and agribusiness, the subject of this

book, it means great opportunities – and great challenges. It means many more potential markets, but also the need to approach those markets very differently than has been done in the past. The convergence is happening on many fronts. Since human history began, we have lived in different communities and tribes, and in different cultures and civilisations. Today, the massive forces unleashed by globalisation are creating what is essentially a new global civilisation. The Great Convergence explains the rapidly rising living standards of the vast majority of the world’s population, especially in Asia. Never before in human history have so many people been lifted out of absolute poverty. Nor have there been so many entrants into the global middle class. Simple things like a flush toilet, electricity at home, a mobile phone, a television and a refrigerator have represented the aspirations of billions. For a long time, they seemed out of reach. Now many, if not most, people believe that these aspirations are achievable. In 2012, some 500 million Asians enjoyed middle class living standards. By 2020, this number will explode to 1.75 billion, an increase of three-and-a-half times in eight years. For centuries, less than 1 per cent of the world’s popula-

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THERE ARE FOUR KEY TRENDS:

Today, the massive forces unleashed by globalisation are creating what is essentially a new global civilisation.

tion enjoyed sufficient income to spend it on anything beyond basic needs. As recently as 1990 the number of people earning more than $10 a day, the level at which households can contemplate discretionary purchases of products such as refrigerators or televisions, was around one billion out of a total world population of roughly five billion. Soon the number of people in the consuming class will exceed the number still struggling to meet their most basic needs. The world has never seen anything like it. For millennia, humanity as a whole has been divided by geography, history, religion, culture and language. Today, despite this rich residue of differences, we are converging on a certain set of norms on how to create better societies. To put it simply, this global convergence is a big deal. A NEW GLOBAL CIVILISATION “Humanity is one”: that has always been a noble aspiration, espoused by leading global thinkers, from Albert Einstein to Mahatma Gandhi. Einstein famously said: “When we survey our lives and endeavours, we soon observe that almost the whole of our actions and desires are bound up with the existence of other human beings. We notice that our whole nature resembles that of the social animals. We eat food that others have produced, wear clothes that others have made, live in houses that others have built. The greater part of our knowledge and beliefs has been communicated to us by other people through the medium of a language which others have created. Without language our mental capacities would be poor indeed, comparable to those of the higher animals; we have, therefore, to admit that we owe our principal advantage over the beasts to the fact of living in human society. The individual, if left alone from birth, would remain primitive and beastlike in his thoughts and feelings to a degree that we can hardly conceive.” In his usual brilliant fashion, Einstein was reminding us that we belong to a larger whole. Gandhi echoed a similar spirit with the remark: “All humanity is one undivided and indivisible family.” Yet even as we listen to their exhortations calling on us to confer equal moral worth to each human being regardless of race, religion, language, or culture, few of us believed that we could improve the condition of humanity as a whole. Without any grand strategy or a comprehensive plan of action, humanity has succeeded in creating a new global civilisation. In recent years, the human condition has improved dramatically for the vast majority of the earth’s inhabitants, and the world is becoming a more civilised place. We are understanding each other better and cooperating more. There is a lot of pessimism in the press and elsewhere, but in reality there are many positive signs that have gone largely unnoticed by many people. If present trends continue, as they are likely to, the human condition will become the best we have experienced since human history began.

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TREND 1: A STEADY DECLINE IN POVERTY We are witnessing the steady disappearance of absolute poverty in the world. In 2000 the UN set a number of Millennium Development Goals (MDGs) to be achieved by the year 2015. Not all the goals were achieved, but one important one was reached ahead of schedule: the halving of global poverty. A lot of this was due to the rapid economic growth experienced by China and India in recent decades. But Africa is also contributing significantly to the reduction of poverty. ‘The Millennium Development Goals Report 2011’, published by the UN, notes that poverty continues to decline in many countries and regions: “Despite significant setbacks after the 2008-2009 economic downturn, exacerbated by the food and energy crisis, the world is still on track to reach the poverty-reduction target. By 2015, it is now expected that the global poverty rate will fall below 15 per cent, well under the 23 per cent target.” The US National Intelligence Council is even more optimistic, projecting that global poverty will be virtually eliminated by 2030. Targeted interventions have also been successful. Today, 12,000 fewer children are dying each day than in 1990. Between 2000 and 2008, improved first- and second-dose immunisation coverage led to a 78 per cent drop in measles deaths, which represents one-quarter of the decline in mortality among children under five. The human condition is improving significantly in this arena too. With all these dramatic improvements in the developing world, the world is becoming a less unequal place. The Center for Global Development, a think tank based in Washington DC, has produced a major report edited by Charles Kenney, which describes “the great convergence in quality of life” between rich and poor countries: “Looking at almost any measure of the quality of life except for income suggests rapid and ubiquitous global improvement. Since 1960, global average infant mortality has more than halved, for example. Nine million children born in 2005 were alive to celebrate their first birthday in 2006 who would have died if global mortality rates had remained unchanged since 1960. And the vast majority of those children lived in developing countries.” The same report makes another fascinating comparison, which strongly supports the Great Convergence thesis. Many in the West continue to believe that Africa made little progress in the 20th century and is not likely to make any meaningful progress in the future. Few expected that infant mortality rates would decline, life expectancy would go up, hunger would diminish and literacy would increase. And yet Africa is progressing well on all these counts. Between 1275 and 1775, the British population and wage rates stayed basically the same. In contrast, in the much shorter period between 1913 and 2000, Ghana’s per capita income increased by 63 per cent. We can see clearly here that even the poorest parts of our world are progressing faster than ever before in human history. Charles Kenny eloquently states: “Countries in every region of the world, from the poorest to the richest, with stagnant or vibrant economies, have all seen improvements in average levels of health and education over the past half century. Most countries, regardless of economic performance, have taken strides towards gender equality, civil and political rights. Progress in quality of life has been particularly rapid in countries previously the furthest behind. There are concerns – the picture regarding global violence is mixed, the quality of education in particular remains extremely low in many developing countries, and recent progress on health has slowed, not least because of the crisis of AIDS. Nonetheless, the overall picture from the last 50 years is of a planet with a growing number of people living a better life.”

TREND 2: A MORE EDUCATED WORLD POPULATION Greater wealth is leading to a more educated world. The whole world is moving toward virtually universal primary school enrolment. The spread of primary education is also leading to more informed citizens. To quote the Center for Global Development report again: “People around the world are also more informed consumers than they used to be. They not only demand soap to wash their hands, they want schools to educate their girls, and they want governments that respect their rights. The increasing demand for education in particular is an important part of the story behind climbing primary enrolments. Less than half of primary-age kids worldwide were enrolled in school in 1950, but by the end of the century the figure was closer to nine out of ten. These are the forces behind global improvements in quality of life.” Education helps to improve the human condition. Psychologist Steven Pinker suggests that as well as becoming better educated, we are also becoming more intelligent. Pinker describes this as the ‘Flynn effect’: “The remarkable finding by the philosopher James Flynn that ever since IQ tests were first administered, the scores achieved by those taking the test have been rising. The average IQ is, by definition, 100; but to achieve that result, raw test scores have to be standardised. If the average teenager today could go back in time and take an IQ test from 1910, he or she would have an IQ of 130, which would be better than 98 per cent of those taking the test then.” There is also a massive increase in the number of university educated people. Leading American universities such as Harvard, Yale, Stanford and Carnegie Mellon are now admitting hundreds of thousands of foreign students, especially from Asia. As a result the norms of these US campuses have spread like a healthy virus across the globe. The numbers are staggering: nearly a million foreign students studied in North American universities last year, with the largest numbers from China, India and South Korea. But only about 2 per cent of US college and university students study abroad. This may explain why Hillary Clinton has urged US students to apply for passports and “not just think globally but get out there and study globally as well.” The world has learned a lot from America. Is America ready to learn from the world? The millions of foreign graduates from US universities (and European, Canadian, Australian and New Zealand universities) have returned home to replicate the Western university experience. As a consequence, our world now has the highest percentage of university-educated populations ever. China provides the most dramatic example. As recently as 1990, only around 3 per cent of each secondary school cohort went on to university or another higher education institute. But by 2010, less than twenty years later, China was able to increase the number of each cohort going to higher education to 29 per cent. The Economist has reported that the number of students in China enrolled in degree courses rose from 1 million in 1997 to 5 million in 2011. The number of higher education institutions in China more than doubled from 2001 to 2011, from 1,022 to 2,263. By 2020, forecasts predict that China will account for 29 per cent of the world’s graduates aged between 25 and 34. China awarded more than 500,000 doctorates in 2009, up from 1,900 in 1993. The nation also graduated 500,000 engineers in 2010, including 10,000 PhDs. The US graduated only 8,000 PhD engineers in 2010, an estimated two-thirds of whom were not US citizens. Since 2008, substantially more PhD engineers and scientists have graduated in China than in the US. In 2001, only 5 per cent of American 24-year olds with a bachelor’s degree were engineers, compared to 39 per cent in China and 19 per cent or more in South Korea, Taiwan and Japan.

Convergence and Cooperation – Water Management Australia is the driest inhabited continent. Over the last century or more, it has developed sophisticated water management techniques that have ensured it has been able to remain a major agricultural producer while using just a fraction of the water resources of many of its international competitors. With the earth’s population now exceeding 7 billion, water shortages and what the United Nations calls ‘water stress’ are problems for more and more countries. The UN estimates that by 2025, nearly 2 billion people will be living in countries with a severe water shortage and that another 2 billion will be living under water stress, where water management becomes a major issue. Water shortages and water quality are global problems. This is especially true in Asia, where most of the world’s population lives. Australia is uniquely placed to work with its Asian neighbours on improving water resource management. Water is essential not just for agriculture, but also for drinking and sanitation, and for industry and electricity generation. Australia’s water management expertise is very good. In 2015 the Australian government established the Australian Water Partnership (AWP) program to share water management practices with countries in the Asian region to build capacity and improve sustainable water management. The AWP is a large grouping of Australian water resources organisations, universities and government bodies, with international partners including the World Bank, the Asian Development Bank and a number of UN agencies. Australian expertise is also involved in the Mekong Water Resources Program, which supports Vietnam, Laos, Cambodia, Thailand, China and Myanmar in water resource planning and decision-making in the vast Mekong River catchment area. And through the South Asia Water Initiative (SAWI), Australia is working with the UK and Norwegian governments and the World Bank to build a knowledge base and management expertise in the three major Himalayan river basins — the Brahmaputra, the Ganges and the Indus — covering northern Pakistan and India, Bangladesh, Nepal and Bhutan.

Convergence and Cooperation – Biosecurity As an island continent, Australia has suffered more than most countries from the ravages of introduced species. Rabbits and foxes were brought to Australia to provide hunters with quarry, cane toads to control sugar beetles, lantana as a decorative plant. The ravages wrought by non-native plants and animals, and by diseases, have made Australians very aware of the importance of protecting the country’s agricultural produce from hidden dangers. Australia has become a major exporter of clean or organic food, but has now also begun to export its biosecurity expertise. An early example of this is the Australia-Africa Plant Biosecurity Partnership (AAPBP), led by Australia’s Plant Biosecurity Cooperative Research Centre (CRC) based in Canberra, which has a number of programs helping African countries with biosecurity and plant safety issues. The Australian Animal Health Laboratory (AAHL) collaborates with similar institutions around the world on techniques such as bioimaging, immunology and disease management in animals – approximately 70 per cent of emerging infectious diseases in humans originate in animals.

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Even though these Chinese and Indians graduate from their own universities, they often graduate with the same cultural and intellectual approaches of Western institutions. Look at the remarkable contributions of Indian Institute of Technology (IIT) graduates, many of whom have helped to fuel the Silicon Valley revolutions and have gone on to become CEOs of major American corporations or the deans of leading American business schools. In the last six decades, the IIT system has produced more than 170,000 graduates. About one-third or more of them have found opportunities in other countries, where they are universally acknowledged to be leaders in their fields. TREND 3: MORE PEOPLE JOINING THE MIDDLE CLASS These rising levels of intelligence, education and prosperity are in turn associated with a rising number of people joining the middle class. Homi Kharas, a senior fellow at the Brookings Institution in the US and an expert on the burgeoning middle class in developing countries, has defined members of a global middle class as “those households with daily expenditures between $10 and $100 per person in purchase price parity (PPP) terms. This excludes those who are considered poor in the poorest advanced countries and rich in the richest advanced countries.” The greatest improvements in history have occurred in the past thirty years, coinciding with the decision of China and India to open up and reform their economies, in 1979 and 1991 respectively. As a result of this opening up of the world’s two most populous countries, a staggering number of people are seeing their living standards improve, especially in Asia. Kharas describes these changes well: “Asia accounts for less than one-quarter of today’s middle class. But by 2020, that share could double. More than half the world’s middle class could be in Asia and Asian consumers could account for over 40 per cent of global middle class consumption. This is because a large mass of Asian households have incomes today that position them just below the global middle class threshold, and so increasingly large numbers of Asians are expected to become middle class in the next ten years.” In 2009, the North American and European middle classes were by far the largest on the planet. But in the space of just one decade, Asia will easily take their place. TREND 4: FEWER WARS AND COMBAT DEATHS The danger of war between major powers is the lowest it has been in human history, and the number of people dying on battlefields is the lowest it has ever been since records have been kept. The number of people killed in battle – calculated per 100,000 population – has dropped a thousandfold over the centuries as civilisations have evolved. Before there were organised countries, battles killed on average more than 500 out of every 100,000 people. In 19th century France, it was 70. In the 20th century, even with two world wars and a few genocides, it was 60. Now battlefield deaths are down to three tenths of a person per 100,000. Long-term trends are reducing the risks of both international and civil wars. Andrew Mack, director of the Human Security Report Project and a former adviser to UN Secretary-General Kofi Annan, comments: “The most reassuring finding is that high-intensity wars, those that kill at least 1,000 people a year, have declined by 78 per cent since 1988. In the 1950s there was an average of six international conflicts (including anticolonial wars) being fought around the world each year; in the new millennium the average was less than one. Recent international wars have also been far less deadly than those of the Cold War era, and the major powers have not fought each other for more than six decades – the longest period of major power peace in centuries.

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The demise of colonialism, the end of the Cold War, a dramatic increase in the number of democratic states, and a shift in elite attitudes towards warfare are among the key political changes that have reduced the incidence of international warfare since the end of World War II. Since the 1930s, public and elite attitudes towards war have changed substantially. Wars of colonial conquest would be unthinkable today. Whereas in earlier eras war was seen as acceptable, even desirable, now it is proscribed except in self-defence, or with the authority of the UN Security Council.” Equally important, argues Mack, has been the dramatic long-term increase in levels of global economic interdependence: “Interdependence has increased the costs of war while reducing its benefits. Greatly increased levels of international trade and foreign direct investment have raised the costs of conquest and shrunk its benefits. One recent study found that, on average, a 10 per cent increase in foreign direct investment reduced the risk of net conflict numbers by 3 per cent. In today’s open global trading system, it is almost always cheaper to acquire goods and raw materials by trade, than to invade a country in order to steal them.” Many in the West live in fear of terrorist attacks. But the probabilities are illuminating. According to Ronald Bailey, science correspondent of Reason magazine, an American was more likely to be killed by lightning (1 in 5,500,000) or by a car accident (1 in 19,000) than by a terrorist attack (1 in 20 million) in the last five years. US President George W Bush used to say frequently: “we live in a dangerous world.” He was dead wrong. The world has never been safer. The decline of senseless killing and the dawn of a new peace clearly mean that the world is becoming a more civilised place. With each passing decade, we worry less and less about being killed by a fellow human being. Surely, there can be no clearer standard of treating fellow human beings in a more ‘civilised’ manner.

“Asia is not just a business opportunity to capitalise on, but a process of modernisation and growth in which we should participate. That’s a subtle but profound difference. It’s also an avenue and an attitude to enduring success.” Chris Rees, Senior Trade Commissioner Singapore, Austrade

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A shared global view The Great Convergence is happening because all of humanity increasingly shares the same goals and aspirations, what we might call a ‘consensual cluster of norms’. KISHORE MAHBUBANI.

ore and more nations are behaving like each other and entering into the global mainstream. This cannot be reversed. Too many minds all across the planet have become connected in a common discourse. Human nature has not changed – what has changed is the social order. As a result of modernisation, people can improve their living standards and those of their children without having to resort to war. The world is becoming a more peaceful and prosperous place because what I call a ‘consensual cluster of norms’ has been sweeping the globe and has been accepted by policymakers all around the world. They have developed the same set of perspectives on how to improve and develop their societies. Let me look at five of them here: acceptance of the frameworks of modern science, reliance on logical reasoning, the embrace of free-market economics, a transformation of the social contract between ruler and ruled, and an increasing focus on multilateralism. MODERN SCIENCE The first key element is the acceptance of modern science and the scientific method. This means that when a society anywhere on the planet encounters a major problem (like floods or droughts, earthquakes or violent storms), it scours the world to find the best scientific solution. For many in the West, this is a natural response – indeed, any other choice is inconceivable.

Many in the West assume that the Islamic world remains resistant to modern science. The Arab world continues to underinvest in research, but things are changing. Although Saudi Arabia remains one of the most conservative societies in the world – it still does not allow its women to drive cars – it has also invested the largest amount of money to build the world’s newest and largest research institution. The King Abdullah University of Science and Technology (KAUST) is an international, graduate-level research university supported by a multi-billion dollar endowment and which accepts men and women from all over the world. KAUST focuses on four strategic areas: energy and the environment, biotechnology and bioengineering, material science and engineering, and applied science, mathematics and computational science. If the Saudi Arabian policymaking elite did not believe in modern science, it would not have made such a major investment. The other rich Gulf Cooperation Council members, such as the United Arab Emirates and Qatar, are following suit. Iran is the most demonised Islamic society in the West, and many Westerners could be forgiven for believing that the country is run by mad mullahs who are opposed to modern scientific education and certainly opposed to sharing this scientific education with women. But the facts suggest otherwise. According to a 2008 study of women in Iran’s higher education conducted by Iran’s Parliament (Majlis) Research Center, Iranian women constituted 65 per cent of the student population in Iran’s higher education, a twofold in-

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Convergence and Cooperation – Agricultural Finance and Trade A key consequence of convergence is the interlinking of economies across the globe. Most of Australia’s agricultural exports now go to Asia, and the financing of the infrastructure underlying those imports is increasingly an international concern. Australian agriculture has always relied strongly on international investment. Traditionally this was from the UK, but in recent years American and now Asian investment has become dominant. The importance of Australia’s agricultural industry in international finance has grown as the mining boom loses steam and investors look for other opportunities. Many countries, especially China, are now investing much more in Australian agriculture. The signing of free trade agreements with the major markets of ASEAN (2010), China (2015), Korea (2014) and Japan (2015) have further integrated Australia’s economy with that of its major Asian trading partners. In 2014, the last year for which data is available, China was the biggest international investor in Australian agriculture, almost doubling its investments to $632 million. In the same period, Chinese investment in Australia’s mining industry fell by more than one third. The biggest single investment was Shandong Ruyi’s $232 million purchase of the giant Cubbie Station, Australia’s largest cotton producer, in Queensland. But there is potential for much more. According to the China Global Investment Tracker, China invested US$3.2 billion in Australia’s agricultural industry between 2005 and 2015, less than 10 per cent of the US$41.6 billion it invested globally outside of China. Australia’s ANZ Bank estimates that Australia will need an additional capital investment of $1 trillion by 2050 to realise its potential. Much of this will come from initiatives driven by government policy, but the majority will have to come from the global financial community.

Convergence and Cooperation – Soil Science Over the past two decades, soil science has become an area of major international cooperation. The International Union of Soil Sciences (IUSS) shares information and promotes cooperation between soil science bodies in over 40 countries, including Australia. 2015 was designated the International Year of Soils, to raise awareness of the importance of sustainable soil management as the basis for food systems, fuel and fibre production, essential ecosystem functions and better adaptation to climate change for present and future generations. Australia, with its fragile soil ecosystem, has by necessity become a major player in international soil science management. Australian soil scientists played a major part in Global Soils Week, held in April 2015 in Berlin, particularly in relation to soil management in vulnerable landscapes. The Australian Collaborative Land Evaluation Program is jointly funded by the Australian Department of Agriculture and Commonwealth Science and Research Organisation (CSIRO), in collaboration with state and territory agencies, to improve the availability of national soil information. This work is the basis of an international interoperability trial led by CSIRO in cooperation with the World Soil Information Centre and soil bodies in New Zealand, the US, Canada. Australia is the first country to create the position of Soils Advocate, held by former Governor General Major General Michael Jeffery. His is a senior role advising the government on soils policy, in cooperation with other countries around the world.

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crease compared to 32 per cent in 1983, the base year in the study. In 2008, Iranian female high school graduates constituted 65 per cent of participants in the nationwide university entrance exam, compared to 42 per cent in 1983. In 2015, 70 per cent of the science and engineering students in Iran were women. The willingness of the hugely conservative Iranian leadership to endorse female education in massive numbers in modern science and technology demonstrates how the new consensus has seeped into some of the most conservative societies on our planet. LOGIC Scientific reasoning, especially logic, is a second vital shared norm. This is another major contribution that Western universities have made: they have unleashed the power of logical reasoning in all corners of the world. The emergence of American-style MBAs and business schools around the globe has had an enormous positive effect. Business school graduates may be less idealistic and more focused on making money than most other graduates, but they may have done far more good for the world than any other graduates. This is because, while they are taught to be competitive, they are also taught to look for optimal win-win solutions in making deals. This search for win-win solutions has now become even more pervasive worldwide and explains why traditionally adversarial countries, like Germany and France, Greece and Turkey, Brazil and Argentina, or even the US and China, can begin to speak to each other with a common language. Steven

As a result of modernisation, people can improve their living standards and those of their children without having to resort to war. Pinker describes this dynamic as “an accelerating escalator of reason that carried us away from impulses that lead to violence.” The Southeast Asian states created a regional organisation, the Association of Southeast Asian Nations, in August 1967. Few expected ASEAN to survive. But nearly 50 years later it is widely recognised as the second most successful regional organisation after the European Union. How did this happen? The culture of the Southeast Asian people did not change. Ancient cultures do not change overnight. A key reason for ASEAN’s success was the change in their leaders’ attitudes toward regional cooperation, as they rationally worked out the costs and benefits. The rational process of analysis overcame decades of distrust, demonstrating that Pinker’s ‘escalator of reason’ was working well in Southeast Asia. The story of Southeast Asia is a particularly inspiring one for our global community because no other region is as diverse in religious, ethnic, cultural and political terms. The region has almost 600 million people: 300 million Muslims, 80 million Christians, 150 million Hinayana Buddhists, 80 million Mahayana Buddhists, and 5 million Hindus. Some Vietnamese Buddhists also practice Taoism and Confucianism, in addition to being Communists. On the ethnic front there is even greater diversity, and ASEAN has the full spectrum of political systems. By contrast, the European Union is a sim-

ple club of Christian-majority states with only one kind of political system. Hence, if the most diverse region of our world can use the forces of logical reasoning to achieve real and meaningful cooperation, it demonstrates well how we all are moving toward creating a more civilised global community. ASEAN shows that a clash of civilisations is not inevitable. FREE MARKET ECONOMICS The third key element in this consensual cluster is the acceptance of free-market economics as the only viable instrument for promoting prosperity. There was a time when there were competing systems of economic development. History has dealt a death blow to the Communist centrally planned economic management systems, with North Korea remaining the only holdout. Even Cuba is gradually opening its economy, following cautiously in the footsteps of China and Vietnam, which are now two of the most dynamic economies in the world. Of course, there are varieties of economic subsystems within the free market universe. The French economy is not a replica of the American economy. Nor is the Indonesian economy a replica of the Indian economy. However, despite these variations, they agree fundamentally with Adam Smith’s major insight: that an ‘invisible hand’ guides the individual to pursue his own self-interest but in doing so, he “frequently promotes the interest of the society more effectually than when he really intends to promote it.” THE SOCIAL CONTRACT The fourth key element is a fundamental change in the traditional social contract between the rulers and the ruled. One reason that the West leapt ahead of the rest of the world is that it was the first to destroy the feudal assumption that the people were accountable to their lords and masters, but not the other way around. This reversal of roles clearly brought about a fundamental transformation in human history. Democratic systems are still not universal, but virtually all countries accept that rulers are accountable to other people. It is now increasingly clear that the governments that will survive and prosper in the 21st century are those that will respect this new direction in history. Fortunately, the number of really bad governments that either oppress their people or ignore their wishes is diminishing. As a result the human condition is improving, even in the most unlikely places. Africa, for example, is moving ahead. It was truly striking when The Economist magazine, a traditional receptacle of conventional Anglo-Saxon wisdom, came out with a cover story on the rise of Africa in late 2011. The headline on the cover screamed, ‘Africa Rising’. And in its editorial, The Economist boldly declared: “Over the past decade six of the world’s ten fastest-growing countries were African. In eight of the past ten years, Africa has grown faster than East Asia, including Japan. Even allowing for the knock-on effect of the northern hemispheres slowdown, the IMF expects Africa to grow by 6 per cent this year, about

the same as Asia. Africa now has a fast-growing middle class: according to Standard Bank, around 60 million Africans have an income of $3,000 a year. The rate of foreign investment has soared around tenfold in the past decade. All this is happening because Africa is at last getting a taste of peace and decent government.” In Myanmar (formerly known as Burma), the military regime that had remained stubbornly in power since 1962, while refusing all entreaties to open up its economy and society, opened up on its own volition, without any sudden increase of external pressure. The rest of the world had virtually given up on Myanmar and assumed that nothing would change. But it did. ASEAN’s policy of continually engaging Myanmar while the West and the rest shunned it was a truly wise decision. The thousand or so ASEAN meetings a year that the Myanmar government officials attended exposed them to best practices in a variety of areas, from economic to environmental management, from health care to education, agricultural to industrial development. Through this exposure, they were able to see firsthand how the ASEAN countries had moved ahead by accepting this new consensual cluster of norms. Through gradual, persistent exposure, the minds of Myanmar policymakers were turned. MULTILATERALISM This story of Myanmar also illustrates a fifth key element in this new consensual cluster of norms: multilateralism. It is one of the fastest-growing sunrise industries in the world. This rapid growth is demonstrated by the increasing number of multilateral conferences and agreements that are entwining a larger and larger number of countries in thicker and thicker webs of organisations. When countries fail to communicate with each other, wars can happen. The lack of contact also allows countries to demonise each other. Multilateralism does the opposite. It brings people together and increases both communication and understanding. And it is particularly helpful when leaders meet face to face. This is why the proliferation of leaders’ meetings is a positive global phenomenon that should be encouraged. In the Cold War, American and Soviet leaders rarely met each other even though a miscalculation by either could have destroyed the world. By contrast, the leaders of America and China meet regularly, especially in forums like the UN, the G-20, and the East Asian Summit. Neither the G-20 nor the East Asian Summit existed a decade ago. I have served twice as ambassador from Singapore to the UN, from 1984 to 1989 and again from 1998 to 2004. I experienced first-hand how a sense of community could develop among people coming from all over the world. Hence, I could develop close friendships with the ambassadors of Brazil, Saudi Arabia, Mongolia and Namibia, to name just four very different countries. The sceptic will immediately retort that ambassadors are functionally designed to make friends across borders. That is true. But it is equally true that these friendships produce major benefits for the world.

ABOUT THE AUTHOR: Professor Kishore Mahbubani is Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore. He spent over 30 years in the Singapore diplomatic service, and was twice Singapore’s Ambassador to the UN, serving as President of the UN Security Council in January 2001 and May 2002. He has written extensively on international relations, public policy and geopolitics, and has been described as ‘the muse of the Asian century’. This article is an edited extract from his book ‘The Great Convergence – Asia, the West, and the Logic of One World’.

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02/ESSAYS

Australia and the Asian century The single biggest factor in Australiaâ&#x20AC;&#x2122;s future as an agricultural exporter is in the changing consumption habits of the rising middle class across Asia. DAVID T HO MAS and KAT YA D OBIN SON examine the phenomenon and its consequences.

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hroughout the last generation, Asia has become the fastest growing region on Earth, with hundreds of millions of people entering the global middle class. With higher incomes come greater expectations. People want cars, consumer goods, better schools for their children, better quality clothing, and international travel. They also want better food. They want to eat out, they want high status products like meat and wine, and they think of eating as a pleasure rather than a necessity. Australia, with its large agricultural surpluses and high-quality produce and products, is well placed to service this growing demand. Indeed, our efforts to meet that demand, and our success in doing so, are key themes of this book. Australia has one of the world’s most efficient agricultural sectors, and some of the cleanest and healthiest food. Australia’s biosecurity is second to none, thanks to high internal standards and strict quarantine precautions. The sheer volume of Asian demand means Australia cannot be the food bowl of Asia, but it can certainly be a specialist and high value supplier of the finer foods in life. Walk down any street in Asia’s cities and globalisation – which usually means westernisation – is abundantly apparent. Some deride it as ‘coca-colonisation’, but it is an unstoppable force. Billboards tout western products, people wear western clothes, radios play western music. Western culture blends with eastern, especially at the dinner table. But when it comes to food, globalisation works both ways. Such are the

delights of most Asian cuisines that they have conquered the west as thoroughly as western food has conquered the east. Australians of a certain age remember when the evening meal was meat and three veg, and when Asian food meant the Chinese restaurant at the local shops. First European, and then Asian, immigrants have vastly expanded Australia’s culinary tastes. It has also given us a greater appreciation of what Asia wants, from paddock to plate. Boundless Plains to Share is full of examples of how Australia’s agricultural products and processed foods are exported to Asia and the world. Australia’s great challenge is to meet the growing and changing demands of Asian consumers as they quickly become aware of the importance of acquiring good food from safe sources. FROM PLAIN RICE TO PRIME BEEF According to the World Bank, the global population is expected to reach 8.2 billion by 2030, a significant increase from its current level of slightly more than 7 billion. Even more remarkable is the exponential growth of the global middle class, most of which will emerge from Asia. There are currently about two billion people in the global middle class. Half of them live in Europe and North America, with only one third in Asia. But by 2030, according to Reuters, the global middle class will grow to 4.9 billion – with two-thirds living in Asia. This large Asian middle class will be the key driver of future global consumption – of cars, food, housing, and a host of other commodities. By 2030 this group

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As the Asian middle class consumer becomes wealthier and healthier, we will see an insatiable demand for a safe and sustainable supply of highquality food. alone will account for more than half the world’s total consumer spending. Driving the growth of the Asian middle class are the world’s fastest growing and most highly populated countries, China and India. By 2030, China’s middle class will reach one billion, nearly 70 per cent of its total projected population. And despite India’s middle class currently sitting at only 50 million (still more than twice Australia’s population), it is expected to grow to 200 million by 2020 and 475 million by 2030. At that time, India will contribute more people to the global middle class than China. One indication of rising affluence is in the usage of technology. In 2009, the Asia Pacific region had just 86 million smartphone users. By the end of 2015, that number had exceeded one billion users – four times the total in Western Europe. With rising incomes, increasing private wealth and a higher standard of living, Asia’s middle class consumers will spend increasingly more by indulging in what they want rather than what they need. The transformation of the Asian consumer is exemplified by China. During the Communist years, people wished to own sanshengyixiang (三转一响) ‘three rounds and sound’ – a wristwatch, bicycle, sewing machine and radio. Today, China’s middle class aspire to Prada handbags, BMW and Mercedes Benz motor vehicles and overseas holidays. One study found the number of Chinese households earning more than $40,000 (considered to be the threshold to afford overseas travel) will nearly triple to 63 million by 2023. THE CHANGING DEMAND FOR QUALITY FOOD As well as being wealthy, these new middle class consumers are both aspirational and health conscious. Healthcare expenditure in Asia is expected to double by 2020. And higher expenditure on health care is matched by greater investment in healthy living. As the Asian middle class consumer becomes wealthier and healthier, we will see an insatiable demand for a safe and sustainable supply of high-quality food. The Australian Trade Commission (Austrade) predicts that by 2050, more than 60 per cent of the world’s demand for food products will come from Asia. Asian tastes are also evolving, demanding more variety in their diets and becoming increasingly aware of the importance of protein and dairy. Rice has been a staple in Asian diets for centuries. Currently, 90 per cent of the world’s rice is produced and consumed in Asia. But recent studies confirm as income levels rise in Asian countries, the consumption of rice per capita declines at a similar pace. Asian middle class consumers are now eating more foods derived from livestock, wheat, imported fresh fruits and vegetables, and other foods that are higher in protein and energy than rice. For example, Chinese beef-meat consumption is expected to increase from 5.13 million tonnes in 2000 to 7.96 million tonnes by 2020. Changes in diet patterns can be attributed to a variety of factors. One fundamental aspect of Asian culture is the importance of health. Food safety and best practices in production are becoming more transparent in Asia, particu-

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larly in China, and many consumers are becoming increasingly interested in the cleanliness and quality of their food. The burgeoning Asian middle class is more willing than ever to pay top dollar for premium products for a combination of health, safety and lifestyle reasons. In addition, the status attached to eating imported foreign foods (particularly dining out) is a huge motivator for Asian middle class consumers to display their growing affluence and influence. According to a recent study, people in Thailand and China spend more on average when eating out than Australians. By 2030, Australia will have nearly 4 billion people in our international neighbourhood, with more money to spend on better quality healthcare services, housing, education and, most importantly, food. Estimates suggest by 2050 Australia will be poised to capture more than $1 trillion in food exports, which suggests that, if managed properly, the agricultural sector represents the next boom for Australia’s economy. However, as will be discussed throughout Boundless Plains to Share, Australia faces enormous challenges in mobilising, energising and expanding an agricultural sector which has been neglected in recent times and which suffers from fragmentation, parochialism and a lack of investment. Australia currently produces enough food for about 60 million people. Our position as a major player in the Asian century will be defined by our ability to increase this number by many times. FIVE DRIVERS OF ASIAN GROWTH 1. Urbanisation One of the most significant drivers of economic growth and expansion in Asia is urbanisation. Urban growth alone produces an increase of 20 per cent of gross domestic product (GDP) per capita. It increases rural productivity, boosts demands for resources, commodities and energy, and drives consumption – urban dwellers spend 3.6 times more than rural residents. Indonesia is experiencing the fastest pace of urbanisation of any country in the world. It is estimated the ratio of Indonesia’s urban-rural migrants will leap to 71 per cent from its current level of 53 per cent. With rapid urbanisation and growth sweeping a nation of 250 million people, analysts are forecasting that Indonesia will rise to become the world’s seventh largest economy by 2030, overtaking the UK and Germany, and will become the third largest middle class among emerging markets by 2050, behind India and China. China is also undergoing urbanisation at an unprecedented rate. In the past thirty years, its urban population has risen from 200 million to a staggering 700 million. By 2025, a further 350 million urban residents will be added. Growth at this scale has meant China now has 15 megacities with a population of more than 10 million people, who will contribute more than $7 trillion to its GDP by 2025. Even today, China has more than 100 cities with populations of over one million. 2. Innovation Asian countries are already leading the world in many areas of scientific development, including the biosciences, information technology and in the development of new forms of sustainable energy. This leadership is best seen in Guangdong, one of China’s original manufacturing hubs and the birthplace of most products ‘Made in China’. The capital of Guangdong province is the massive port city of Guangzhou (once known as Canton), which has a population approaching 10 million. The Guangzhou municipal government has been promoting its aim to move away from products ‘Made in Guangzhou’ to ‘Created in Guangzhou’, propelling the city up the global value supply chain. By 2020, Guangzhou aims to increase the output value of high-tech products to RMB 2 trillion ($430 billion).

The growth of China’s innovation industry is also evident in the renewable energy sector, where China leads the world in investment into renewables – more than $56 billion in 2014. China should not be disregarded in this respect. Its ability to innovate at speed and scale already places it as a major world player in research and development as well as in manufacturing, and challenges the established innovation powerhouses of the US and Germany. Its telecommunications products company Huawei is already the world’s largest. 3. Demographics A young, dynamic and ambitious population can propel economic and social growth over long sustained periods. It has been predicted India will surpass China during this decade as the world’s fastest growing economy, due to its low average age of 25 and the massive growth of its working-age population. India will soon have an incredible 20 per cent of the world’s working-age population (people between the ages of 15 and 64). Throughout the next decade, India’s working-age population will rise by 125 million, and by another 103 million in the following decade. Not only is the population growing, it is becoming increasingly educated. By 2020, India’s higher-education graduates will account for 12 per cent of the world’s total, more than that of the US. A massive, educated workforce has created an enormous opportunity for India to become a leading global economy. But as a developing country, the risk of unemployment remains significant. It is vital the Indian government delivers on its promise to supply more jobs, skills training and infrastructure investment to ensure opportunities for its young and growing workforce. 4. Globalisation Despite a great deal of talk, buzzwords and catchy titles, the process of globalisation is still in its infancy and will continue to propel companies into the increasingly competitive international market, where the potential for economic gains are immense. Riding the waves of globalisation, Japanese companies such as Canon and South Korean companies like Samsung and Hyundai have achieved great successes in overseas markets (Canon has become the largest camera firm in the US). After the initial waves of globalisation, Asian firms are emerging in an increasingly competitive international market where they are internationalising their brands, workforce and operations. For example, Hyundai Motors has invested $2 billion across 15 years in its Indian factory in Chennai, which now has the capability to build a car every 68 seconds, making it the country’s second-largest car firm behind Suzuki. In many respects real globalisation has not even started yet. In spite of significant advances in technology, and despite high speed broadband and interconnectivity, there remain many new opportunities to connect and collaborate with other global business leaders and entrepreneurs in China and India, or to outsource low level tasks to the Philippines, Indonesia or Vietnam. 5. Aspiration Apart from an abundance of land, people and capital, Asia benefits from a dynamism and entrepreneurial spirit derived from a combination of ambition, energy and aspiration. In many countries, and especially India and Indonesia, this aspiration comes with a young demographic profile that will propel economic growth well into the next century. Only 30 years ago most Asian countries were suffering extreme poverty, for a wide range of largely unrelated reasons. Since opening up and attracting foreign investment, they have now acquired a taste for success and wealth, a

desire that has energised the whole region. This is best seen in China, which has emerged as Asia’s leading economy. It held this position a millennium ago and now, after more than a century of massive political unrest and significant disruption of its society and economy, China has regained what most Chinese regard as its rightful place in the world. The policies, introduced in the 1980s, that led to China opening up to the world and returning to a market economy not only energised the county’s economy but also sparked great patriotism amongst the population as China re-entered the global landscape. China has been extremely driven to put the economic and social damage and chaos of the Great Leap Forward and Cultural Revolution in the 1960s and 1970s far behind it. Since 1981, China has lifted a staggering 700 million people out of poverty and, as a result, is now the major engine of growth in Asia. OPPORTUNITY FOR AUSTRALIA Boundless Plains to Share is full of examples of how Australia’s agricultural products and processed foods are being exported to Asia and the world. Australia’s great challenge is to meet the growing and changing demands of Asian consumers quickly becoming aware of the importance of good food from safe sources. Australian agriculture faces significant challenges and opportunities to increase its influence in Asia and the world. This is particularly the case with China – our largest trading partner – and a fast growing Indonesia – our closest neighbour – which has access to people and capital but not enough land. There are many factors working in Australia’s favour: the cleanliness and safety of our food (biosecurity), proximity to and growing links with Asia and the fact that we have the very products that Asian consumers are increasingly demanding. All that remains is the ability to capitalise on these advantages. Australia has an opportunity to become a major food and agricultural player in its own right but, more importantly, it has the ability to export its knowledge, capabilities, innovation, experience and technology to Asia. This will be the defining challenge for Australia (the “lucky country”?) as it transitions “from mining to dining” and lives up to the words so nicely crafted in the second verse of our national anthem:

Beneath our radiant Southern Cross We’ll toil with hearts and hands To make this Commonwealth of ours Renowned of all the lands For those who’ve come across the seas We’ve boundless plains to share With courage let us all combine To Advance Australia Fair.

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Why Asia is important – building with BRICs What are the BRICs? And why are they important to Australia?

hina and India are the largest two of the BRIC economies, which most economists agree will dominate the global scene in the 21st century, along with the United States. BRIC stands for Brazil, Russia, India and China – countries with the population, land mass and economic strength to be major players in a world economy that has experienced more change in the past 30 years than it has since the start of the industrial revolution in the early 18th century. Not everyone agrees on the reasons for these changes, but there have been a number of significant events that have been a factor: n The fall of the Berlin Wall in 1989, which removed the Iron Curtain, levelled the economic playing field and opened up communist countries to foreign investment and trade, and allowed access to western consumer markets. n Chinese leader Deng Xiaoping’s ‘southern sweep’ in 1992, which confirmed China’s firm commitment to economic reform, capitalism (‘with socialist characteristics’) and opening up to foreign investment after the events in Tiananmen Square in 1989, which threatened to derail China’s reform program.

n The end of military dictatorships, hyperinflation and political

uncertainty in Latin America, and in particular the election of Brazil’s reforming President Fernando Henrique Cardoso in 1995. n The threat of the Y2K bug caused many Indian software engineers to be engaged by US companies to resolve the threat of a computer meltdown on 1 January 2000, helping to launch India’s IT sector as the economic engine of modern India. n The growth of the Internet, which became accessible to everyone by the late 1980s, and which became the enabling tool that unleashed the creativity, innovation, connectivity and consumption power of literally billions of entrepreneurs and consumers all over the world. n The Global Financial Crisis in 2007-08, considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s. The GFC, among other things, has dramatically reduced the US’s influence as the world’s most dominant superpower. n The decision in 2009 for the G20, which included the four BRIC countries, to replace the G8 as the main economic council of wealthy nations.

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LARGEST COUNTRIES BY POPULATION (m)

BRICS has become much more than a clever acronym

1,362 1,252

Whether caused by one or all of the factors described above or others, today there is little argument that the economic baton has been passed to a group of larger, more ambitious and rapidly industrialising countries. The BRIC acronym, first coined in late 2001 by Jim O’Neill, then head of economic research at influential banking group Goldman Sachs, has proved to be both prophetic and inspirational and has been acknowledged as the “call of the century” by leading investment commentators. Originally launched as a new investment theme to galvanise private and institutional investors, even O’Neill was surprised when the BRIC idea inspired the heads of each of the four governments to form their own BRIC Leadership Group, commencing with the first BRIC Leaders Summit in Yekaterinburg, Russia in June 2009. They have met as a group every year since, inviting South Africa to join them in 2011 to become the ‘BRICS Summit’. In 2013 they launched the BRICS Development Bank, a multilateral development bank operated by the BRICS states as an alternative to the existing US-dominated World Bank and International Monetary Fund, designed to foster greater financial and development cooperation among the five emerging markets. This firmly places the BRICS group at the centre of global geopolitics, infrastructure development and the future of economic policy-setting. BRICS has become much more than a clever acronym. In order to understand why the BRIC group is so important as a guide to future economic growth, let’s start by examining the three traditional drivers of economic growth, land, people and capital, and see how each BRIC country ranks against themselves and others under these three criteria. Firstly, let’s compare the size of the world’s countries. Russia is easily

321 256 204

China

India

USA

Indonesia

Brazil

199

Pakistan

182

Nigeria

169

Bangladesh

146

Russia

127

Japan

SOURCE: INTERNET WORLD STATS

the largest country in the world (17.1 million km²), followed by Canada and the US. The remaining BRICs – China (9.6 million km²), Brazil (8.5 million km²) and India (3.3 million km²) – are in 4th, 5th and 7th place respectively (Australia is 6th). If all you needed was land, Russia would be the world’s largest economy. But it is about more than just land. You also need people to generate growth and productivity. The next chart shows the ten countries in the world today with the largest populations. China and India, each with a population of well over a billion, dominate this picture. The availability of land and people was enough to dominate the global economy prior to the 19th century, but the Industrial Revolution changed

LARGEST COUNTRIES BY GDP, 2014 (US$b)

L A R G E S T C O U N T R I E S B Y A R E A ( m i l l i o n k m 2) 17,348

17,098

9,985

10,356 9,573

9,526 8,516 7,692

4,602 3,874 3,287

Russia

Canada

China

USA

Brazil

Australia

India

2,780

Argentina

2,725

Kazakhstan

2,950 2,382

Algeria

USA SOURCE: IMF

SOURCE: CIA FACT BOOK

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China

Japan

Germany

United Kingdom

2,834

France

2,347

2,148

2,051

Brazil

Italy

India

1,861

Russia

everything by introducing machinery, technology and energy into the equation as the new drivers of productivity and growth. This all had to be paid for, and the availability of capital became a vital differentiator between productive and unproductive economies. So which were the largest economies in 2014? While the US economy (GDP $17.4 trillion) is still the largest in the world by some margin, the rapid growth of emerging economies means that this position will be challenged and overtaken within the next decade. In fact, the Chinese economy (now $10.4 trillion and growing at an average of 7 per cent per annum) is predicted to overtake the American economy as the largest in the world by 2025, if not sooner. The next graph below forecasts the size of the world’s largest economies in 2050. As can be seen, the picture is dominated by China ($70.7 trillion) which is predicted to be almost double the size of the US ($38.5 trillion).

in the chart at all, as it doesn’t meet any of the minimum criteria. It can be concluded, therefore, that its inclusion in the BRICS group and G20 has more to do with its potential political influence, and its position as the leading economy among the 56 African nations, rather than its economic importance today.

COUNTRIES WITH A POPULATION OVER 100 MILLION

COUNTRIES WITH LAND OVER 2 MILLION KM2

Argentina

Bangladesh

Kazakhstan

LARGEST COUNTRIES BY GDP, 2050 (US$b)

Pakistan

Algeria

Nigeria Russia

Brazil

70,710 DR Congo

Saudi Arabia

Canada

38,514

Indonesia

Australia

Mexico

37,668

United Kingdom

Italy

11,366

USA

Japan

USA

South Korea

China

India

Brazil

9,340

Mexico

8,580

Russia

7,010

Indonesia

6,677

Japan

5,133

5,024

United Kingdom

Germany

SOURCE: GOLDMAN SACHS

When you combine the three economic drivers of land, people and capital, and plot the world’s leading countries against each of these measures, an interesting picture emerges. The defining characteristics that set the BRIC countries (and the US) apart from the rest of the world are the aggregation of the three key factors of land, people and capital. There are many observations and comments to make about the positioning and juxtaposition of some of the countries in this picture, in terms of their access to the key economic inputs of land, people and capital, but here are a few which are particularly relevant to readers of Boundless Plains to Share: n The middle circle (countries with capital, with or without large amounts of land and people) contains the most influential economies in the world today, including most of the G20 countries (other than Spain and the Netherlands), all of the BRICs and three of the four countries that comprise the next emerging group known as the “MINT” countries (Mexico, Indonesia, Nigeria and Turkey). The only two countries in the G20 that don’t appear in the middle circle are Argentina (top left) and South Africa (see comments below). n Although a member of the BRICS Summit, South Africa does not appear

Netherlands

France

Turkey

Spain

Germany

COUNTRIES WITH NOMINAL GDP OVER US $600 BILLION

n If farming, agriculture, soil development and safety are the future

challenges facing the world in providing safe, nutritious and sustainable sources of food to the world’s emerging middle class, then the countries that appear in the top left circle are perhaps the most relevant as they have access to most of the world’s land and resources (but, in some cases, not enough capital, knowledge or people). This provides a significant opportunity for highly populated and rich countries to reinvent themselves by exporting their knowledge, capital and labour

to some of the countries that need them most.

ABOUT THE AUTHOR: David Thomas is the founder and CEO of Think Global Consulting, a facilitator of business and investment between developed and emerging countries, with a particular focus on the BRIC countries (Brazil, Russia, India and China). He has wide experience in Asia, particularly the opening up of China, the rise of Japan and the Asian tigers, and the emergence of India. More recently, his influence and activities have extended to Latin America and Eastern Europe. Katya Dobinson is Business Manager at Think Global Consulting and represents the new emerging group of young Australians engaged with and passionate about China and Asia.

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02/ESSAYS

Agriscience tames an alien land Agricultural science has been an essential component of Australia’s evolution as a major agricultural exporter. It has improved stock yields, helped grain grow in hostile environments, and improved soils lacking many essential nutrients. LINDSAY FALVEY examines the development – and importance – of agriscience in Australia.

ustralian agriculture has been in continuous expansion since the First Fleet arrived in 1788. What is not widely known is about 30 per cent of Australia’s cropping land has been cultivated for less than 20 years, and more than half for less than 40 years. The increase in land use for agriculture is a direct result of the application of science. Land once thought to be marginal, or abandoned in the past due to drought, is now being made productive through the application of a range of technologies, most developed in Australia. Until the 1950s agriculture still comprised 70 to 80 per cent of Australia’s exports. The proportion is now much smaller, but the value and volume of Australia’s agricultural output, and its agricultural exports, have continued to increase. The drop in agriculture’s share of the economy has not been because agriculture has declined, but because of the massive growth other industries such as services, finance, telecommunications and mining. Australia is one of the world’s top ten reliable food exporters. The total farm value of produce now exceeds $50 billion, of which about $40 billion is exported. Add to this the value of food processing – around $100 billion – and retailing of around $140 billion, and we find that the agricultural, food processing and related service and retail sectors employ more than half a million people. As the following diagram illustrates, our farmers manage more than 400 million hectares, half of the continent’s land area. Just 32 million hectares is for crops, of which 2 million hectares is irrigated with eight gigalitres of water annually. Agriculture continues to be absolutely critical to Australia’s economic, social and environmental wellbeing.

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LAND USE IN AUSTRALIA

PRODUCTION FORESTRY - 1% GRAZING MODIFIED PASTURES - 9% GRAZING NATURAL VEGETATION - 46%

DRYLAND CROPPING - 3% WATER - 2% NATURE CONSERVATION - 7% OTHER PROTECTED AREAS INCLUDING INDIGENOUS USES - 13% MINIMAL USE - 16%

Demand for Australia’s agricultural produce and food products continues to rise exponentially, and tastes in our major export markets continue to change with growing population and wealth in Asian nations. The global demand for food is estimated to increase by 70 percent by 2050, with fully three-quarters of that demand coming from Asia. This defines a new era of efficiency for Australia, with further rural adjustments, and the need for public education, additional capital and constant innovation. Yet, as indicated in the following diagram, Australia provides only about 3 per cent of the global food trade, which can feed only about 2 percent of the Asian population. So much for the ‘food bowl of Asia’ idea – Australia simply does not have the capacity. The secret to our export

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success is quality, not quantity. We have good soils in eastern Australia – Ferrosols, Vertosols, Dermosols, Chromosols, Kandosols and Tenosols – and we also have many highly weathered soils. These are manageable, but historically our major constraints have revolved around variable rainfall and market isolation. Modern communications and transport mean the isolation factor is no longer as relevant, but ‘droughts and flooding rains’ mean trying to farm Australia as if it were Europe, as the early settlers did, does not work. The new environment meant Australia’s early farmers quickly realised they needed to innovate and develop new technologies that enhanced production. Sometimes they needed to do this merely to survive. SCIENCE AND INNOVATION Innovation, born of necessity, evolved into a highly efficient system of agricultural research and development. It is an ethic that has led to Australia producing a disproportionately high number of world-leading agricultural technologies, scientists and managers. It has been an amazing achievement to make Australia’s often harsh environment so productive. Some examples include: the underpinning science that has produced the most Nobel Prize winners per head of any nation; the similarly disproportionate number of agricultural consultants and managers engaged in the international development sector, and leaders in the world’s Consultative Group for International Agricultural Research (CGIAR) ‘Green Revolution Centres’; technologies as varied as refrigeration, mechanical sheep shears and the rotary hoe; tank-farming of tuna; practical in-vitro fertilization; permanent-press wool, and the myriad advances that the Australian invention of the atomic absorption spectrophotometer allowed.

AUSTRALIA’S SHARE OF WORLD TRADE (DAFF, 2007)

WHEAT SUGAR RICE OILSEEDS PIG & POULTRY MEAT BEEF & VEAL SKIM MILK POWDER COURSE GRAINS 0

% OF GLOBAL PRODUCTION

Beginning with wool and dairy, and then with grains, Australia became a significant force in global agriculture and in global agricultural science. Once fostered by the exacting realities of the bush, the resources that produced this rise to power must now be cultivated from research, science and education. In this new world, the themes that dominate Australian agriculture include a market focus shift from Europe to Asia, the urban population’s isolation from agriculture, increased environmental awareness, and developments in science and technology. The many facets are increasingly integrated, with a growing focus on the importance of agricultural science, or agriscience. Agriscience has traditionally been based on an integrated understanding and application of science to soils, plants, animals, business, markets and people. This has been supported by such disciplines as biochemistry, genetics, physiology, pathology, nutrition, management, microbiology, sociology

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and economics. The field has served Australian agriculture efficiently by conceiving of it as part of the environment; by adapting to it, changing it, or constantly managing according to it. The principles remain the same today, although growth in knowledge has increased specialisation and consequently made integration even more important. This can be illustrated by considering the standard factors of economic production – land, labour and capital. Agriscience has produced efficiencies in the use of each of these, and in doing so has highlighted the fact that its technologies can substitute in part for land and labour, relying on capital to fund continuous innovation. In establishing agriculture in Australia we have made many mistakes. We introduced rabbits, foxes and a host of weeds. We mistook native grasslands for pastures. We subdivided lands into farms assuming stable rainfall. We cleared forests and scrub unmindful of soil conservation. Periodically we even delude ourselves that we are a major global food producer. Such was our fervour for development, it became un-Australian to worry about soil conservation or land clearing, or to value our native grasslands. Agriscience has countered these and other views, and has enhanced our awareness of the land in which we live. A culture of developing techniques has come to characterise our approach to agriculture. WATERING OUR SOILS A continuing theme has been management of water. In this dry continent, we have logically developed our more intensive agriculture in the better-watered areas, notably the Murray-Darling Basin. Covering about 15 per cent of Australia, the Basin produces one fifth of our vegetables, half our fruit and nuts and more than 60 per cent of our grapes. But this has meant that extensive irrigation has reduced river flows in the Basin by perhaps 75 per cent over time. This has concerned many, but agriscience helped us understand that periodic floods from very wet seasons continue to flush out the 2 million tonnes of salt that is constantly washed out of the soils of our old landscape. Agriscience works comprehensively, from farm technologies through to the integrated policy advice that is inevitably tempered by political feasibility. In water planning, a sustainable approach must begin to include not only rainfall and surface waters but the groundwater that constitutes 95 per cent of our fresh water. Profligate water use has finished. Today serious farmers seek the maximum sustained production from each drop. Agriscience allows this through such innovations as breeding water-efficient crops. Today’s wheat and similar crops are many times more water efficient than a century ago. Water losses in irrigation delivery continue to be reduced, and water application techniques have led to further savings of 70 per cent of water per unit of production. This has all been supplemented by improved, purpose-designed rain forecasting, and particularly the ‘nowcasting’ that can inform farm management within ever smaller areas. In addition to water, soil security is critical to sustainable agriculture. Soil is vital for nutrients, water, climate, recycling, biodiversity, ecosystem health, carbon sequestration and physical plant support. We have many good soils, and we use them well with support from agriscience. We also have soils that are highly weathered, saline, sodic, acidified, compacted, eroded, depleted or have reduced organic matter, biological activity or structure. It is on both good and poorer soils – most of which have unpredictable rainfall – that agriscience has produced our agricultural success, and ongoing research continues to widen our knowledge of all of soil types. The innovations that continue to allow Australia to be a major agricultural nation rely on the expertise from and integration with our universities and research institutions, which are among the best in the world.

AUSTRALIA’S AGRICULTURAL EXPERTISE Originating in the agricultural colleges that arose from 1885 from departments of agriculture in South Australia and Victoria, Australia’s first Faculty of Agriculture opened in 1905 at the University of Melbourne. Organised agricultural research in Australia is generally dated from 1916, when the Commonwealth Advisory Council of Science and Industry became the Council for Scientific and Industrial Research (CSIR), which was initially oriented to agricultural production. By the time CSIR had evolved into CSIRO in 1949 it had a broader mandate spanning most fields of technology. This suits modern agriculture, which now relies on every field of science. The agriscience expertise of CSIRO, working with universities and state government agencies, has regularly provided new practical inventions. These have included: ■ I920s – Horticultural techniques, extended storage life for chilled beef, improved quality of both frozen and dehydrated meats, prickly pear biological control and economic entomology. ■ 1930s – Systematic plant crossbreeding, skeleton weed control, tobacco selection, worm control in sheep, identifying sheep cobalt deficiencies and understanding of rumen function. ■ 1940s – Tropic-proof canned butter, innovative food preservation techniques, sheep external parasite control, the nucleus of the National Herbarium, log peeling lathes, poppy morphine estimation, drug extraction techniques and timber research. ■ 1950s – Atomic absorption spectroscopy, rabbit biological control, merino genetics, wool chemistry, textile technologies, tropical pasture establishment, wildlife surveys and permanent-crease wool fabrics. ■ 1960s – Tropical pasture management, white muscle disease remediation, fly control through dung beetles, sirex wasp control, mechanised cheese manufacture, viticulture improvement, wool dyeing and stored-grain quality assurance.

■ 1970s – Wool spinning advances, chemical defleecing, poultry virus isolation, shrinkproof wool, non-flammable wool, salvinia control and buffalo ecology. ■ 1980s – Calicivirus control of rabbits, transgenic sheep, aphid resistant lucerne, climate change understanding, orchard lice control, Johne’s disease management, Asian food taste testing and recombinant DNA gene shears technology. ■ 1990s – Bushfire dynamics, nano-diagnostic devices, milk product diversification, salinity dynamics, water quality monitoring and plant genetic manipulation. It is an impressive list, and it continues to grow. Since 2000, agriscience in Australia has continued with world-leading research and applications even though its research budgets have declined in proportion to other industries. This tradition of research has produced such Nobel Laureates as Peter Doherty and Elizabeth Blackburn for their contributions to immunology and molecular genetics, as well as equally significant Australian agriscientists working both here and abroad. It is such expertise that also allows us to participate in the highest levels of global science, such as climate change, which may well affect us more than most developed nations. Climate change is real. It has been a focus of agriscience for a century in its continuous quest to adapt agriculture to new environments. The imperative now is to continue our research to adapt plants and animals to the new environments induced by climate change. This requires expertise in the same agriscience fields as the past – breeding, nutrition and management – supported by new meteorological means of anticipating weather. Serious farmers today base their crop schedules on sophisticated interpretations of ocean temperatures and atmospheric science. And thus all aspects of agriscience are a global effort.

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GLOBAL PARTICIPATION Research has allowed global crop and livestock yields to increase in parallel with agriscience investment. During the 1970s, 80s and 90s research investment in developing nations continued yield and production increases, but it has often relied on adapting outputs from developed nations’ agriscience. With population and wealth driving food demand, a sustained investment profile is required. But this has not eventuated despite agriscience now being a global activity. Reductions in the level of global research participation relative to national wealth can be a costly saving in terms of both increased regional instability and spin-off technologies applicable at home. Since agriscience relies on complex training, much research is conducted jointly with international laboratories in major universities. Continued support for research education is a simple indicator of sustained export potential. In addition, sharing one’s international development responsibility becomes a field that feeds knowledge back into agriculture. Proportionate to its size and wealth, Australia has been a particularly strong participant in international agriscience activities. These activities were formalised in 1982 with the establishment of the Australian Centre for International Agricultural Research (ACIAR). Bridging Australia’s agriscience and international aid from a wealthy Western nation with temperate, subtropical and tropical climates relevant to developing countries, ACIAR supports research partnerships with the CGIAR Green Revolution Centres. This support has been of huge benefit to developing nations. In turn, benefits to Australian agriculture have significantly outweighed our investment. In fact, independent evaluation of the ACIAR has indicated benefit cost ratios for developing nations as high as 67:1 with a conservative overall estimate of at least 5:1. Some of the outstanding contributions have included: rodent control in rice crops in Laos; eucalyptus production in China; banana skipper control in Papua New Guinea; pig genetics in Vietnam; footrot control in Nepal; Newcastle disease vaccine for chickens; and rendering rice straw useful in buffalo and cattle diets. Often overlooked, this modest aspect of Australian agriscience has produced major national benefits such as: protecting our status as the world’s only bee mite-free nation; allowing a viable sandalwood industry in the Ord River region in northern Australia; keeping fruit flies at bay; introducing pest resistant sorghum and water efficient wheat; safeguarding us from pathogenic livestock diseases such as avian influenza and swine fever; improved protein in northern cattle diets; improved citrus rootstocks, pest control in mangoes and post-harvest fruit quality. These and other benefits of agriscience can be illustrated by two industry examples: wheat and dairying. BECOMING A MAJOR WHEAT EXPORTER Australia is one of the world’s top three wheat exporters. 38,000 farms produce about 40 million tonnes of wheat each year, which allows us to export about 14 per cent of globally traded wheat – even though we produce only 5 percent of the global total. It is not just the $9 billion income and abundance of clean wheat product in our foods that benefits Australia, but in exporting to food-poor regions we contribute to global stability, as grain shortages are a major source of conflict and emigration. We have learned a lot from our experience, our innovation and our excellent agriscience, as the following diagram illustrates. Following the red line of running averages, it is clear that initially we mined soil nutrients causing wheat yields to decline until phosphate fertilisers and plant breeding gained back some of the initial potential. Australia’s leading role in the rotational use of natural nitrogen fertilising legumes then combined with engineering advances to continue yield

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increases, which were extended further by application of disease-breaking crops and nitrogen fertilisers. The variation between years indicated in the black line were mainly associated with rainfall, and the point had to come when not only that variability but the absolute amount of rain would limit yield increases, as is evident after about the year 2000. But just as each innovation enhanced yield, so now agriscience addresses water usage. AUSTRALIA’S AVERAGE WHEAT YIELDS (kg/ha) 2.5 Break crops Nitrogen fertilisers

Millenium drought

2.0 Legume nitrogen Better rotations Mechanisation

1.5

Superphosphate New cultivars Fallowing

1.0

0.5

Nutrient exhaustion

Semi-dwarf cultivars Selective grass herbicides

0.0 1860

1880

1900

1920

1940

1960

1980

2000

2020

Our forebears quickly learned about rainfall variability, and ploughed regularly to control weeds that sucked soil moisture during the summer. Resultant soil erosion and percolation-induced salinity thus became subjects for agriscience. Today, moisture, nutrients and soil are conserved by use of biologically benign weed sprays and retention of the harvest stubble previously burnt off. Adapting space and engineering developments, agriscience applied global positioning system (GPS) technologies to sophisticated tractors that accurately position sown seeds between stubble at the optimum depth. Precisely placed, and protected from drying winds by last year’s stubble, seedling emergence and survival increased. With precise routes and reduced tractor traffic, ploughing is less necessary to break up soil compacted by machinery. This too has increased yields. At the same time, agronomy determined means of reducing disease transmission across years by introducing commercial fallows of crops with such break crops as canola, leading to wheat yield increases of up to 20 per cent. One of the next innovations from plant breeding will likely use genetic variants that can be sown in summer at greater depth into moist subsoil to emerge with even greater resilience to Australia’s erratic rainfall. In the process of such research, agriscientists noted high yielding crops used more water to transport nutrients and photosynthesise. Water-use efficiency then developed into a leading area of agriscience in Australia based on land-based nuclear or electromagnetic sensory equipment, and molecular techniques for selection of water-efficient varieties of wheat and other plants. As the public comes to realise the variable nature of Australia’s rainfall and climate change, they are learning agriscience has successfully worked on both for decades to ensure an efficient and resilient agricultural industry. This is how good agriscience works, and Australia has been a leader. To maintain that lead, we must breed new strains of plants and animals even better suited to our land. Early varieties of many crops introduced to Australia struggled, and more suitable strains were bred from the few that survived. The rate of such genetic improvement has continually accelerated, to the extent that it is a constant process that facilitates resistance to diseases, enhances water and nutrient use efficiency and raises yields.

Today complex science isolates DNA markers of desirable genes, evaluates traits and analyses billions of data sets. This science has developed from those early observant farmers and their laborious pollination in systematic field plots with thousands of samples, to radioactively-induced variations to arrive today at the study of minute gene sequences. The general process has been the same throughout and today allows integration of genetic material from wild relatives. Inclusion of genes inherited by a plant’s descendants has mainly been used in Australia to confer resistance to benign herbicides and to insects and diseases. Other applications include enhanced drought and salinity tolerance and reduced pesticide and fertiliser requirements. Globally, and incidentally also involving Australian expertise, other genetic innovations that provide huge improvements in human health include means of overcoming vitamin A and iron deficiencies and their debilitating effects. HOW DAIRYING BENEFITS The role of agriscience in Australia’s wheat industry is mirrored for livestock in dairying. As our third largest agricultural industry and with a major export orientation, the industry provides about $4 billion income to farmers – around 10% of our agricultural value – and vastly more in value-added dairy products. Dairy is our largest processed food export, and needs reliable rain or irrigation, nutritious feed, integration with processing and sophisticated scientific and management expertise. Until the 1830s, Australian dairying struggled with unsuitable soils in unreliable rainfall areas, but then expanded, with development of suitable lands to service larger settlements with farm-produced butter, cheese, cream and milk. The next big advance was in the 1880s with the invention of practical refrigeration in Geelong, and the introduction of exotic pasture species. By the turn of the 20th century, farmer-cooperative butter factories had replaced farm manufacturing and the industry expanded profitably. Pasteurisation enhanced milk life and safety, and milking machines were introduced, although uptake was slow in the absence of electricity.

petitiveness to reliably become the fourth largest dairy exporter after the European Union, the US, and our dairying neighbour New Zealand (where even the corner stores are called ‘dairies’). Australia’s dairy exports today are ten times higher than they were in 1980, and the industry is continuing to modernise its business structure. Based on the natural advantages of our southern soils, rainfall and climate as indicated above, agriscience is now enhancing yields and extending the range of profitable dairying. Australia’s southern climate allows cows to be pastured all year on good soils, with marked benefits to the health and the welfare of the animals themselves. Australian milk yields are only 60 per cent of that of housed cows in the US, but Australian dairy farms enjoy higher profitability and closer proximity to major Asian markets. Milk product exports have also stimulated related industries to export dairy equipment, expertise, hay and dairy breeding stock. Often in cooperation with New Zealand, our agriscience has underpinned dairying’s continuous goals of efficiency though innovations in endocrinology, electronics, engineering, health, genetics, nutrition management, pastures, robotics and welfare. Examples of recent innovations include heat identification, robotic milkers and individual cow identification to record movement, weight, blood, milk and rumen parameters linked to automatic allocation of cows to different paddocks, feeds and treatments. We maintain our competitive advantage of outdoor pasturage through constant assessment of feed availability, growth rate and quality to inform strategic pasture use and supplementary feeding to optimise individual cow nutrition. Australia’s herd recording details lactation status, optimal time for sale of retiring cows, prescriptive therapies for dry cows, selection of replacement heifers and reproductive performance as a component of Australian Breeding Values and Herd Improvement. Incorporating biosecurity management, welfare practices for bovine wellbeing and improvements in milking shed design from research have further enhanced our continuation of a humane and profAUSTRALIAN DAIRY EXPORTS BY REGION, 2009 MIDDLE EAST - $312M

MILK PRODUCTION BY STATE

EUROPE - $77M

JAPAN - $554M

SOUTH AUSTRALIA - 7.53% OTHER ASIA - $618M NEW SOUTH WALES - 12.79% VICTORIA - 60.50%

AFRICA - $130M

QUEENSLAND - 6.34% AMERICAS - $207M TASMANIA - 8.53%

WESTERN AUSTRALIA - 4.31%

Then for most of the 20th century the industry enjoyed fixed priced exports to the UK until it joined the European Economic Community in 1973. The slow unravelling of intricate protective regulations then began and agriscience became an even more essential partner of dairying across its spectrum from soils to marketing processed product. Deregulation, long overdue, led to application of new technologies, infusion of essential capital and consolidation of farms into more economic sizes. These changes improved Australia’s com-

SOUTH-EAST ASIA - $890M

OTHER - $135M

itable industry. Each innovation has required capital, often associated with expansion of farm size. Our markets for dairy products are overwhelmingly in Asia, as the chart shows. Asia is also starting to contribute to that deficiency of most of our agricultural industries: serious capital investment. This investment can be linked to markets, allowing continuous introduction of new technologies. Thus Asia begins to contribute to our major missing ingredient. CAPITAL – THE MISSING INGREDIENT The history of Australian agriculture is a history of addressing deficiencies.

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Australia has suffered from poor levels of soil nutrients, low moisture and unpredictable rainfall, the depredations of introduced species and the necessity of developing suitable management techniques to address these problems. One commonly overlooked and continuing deficiency is capital. Australia has a much higher per capita income than most countries, yet investment per hectare of agricultural land remains low by international standards. This relative lack of investment is limiting our ability to apply many of the new technologies essential to continued advances in efficiency. In addition, we have shown a reluctance to invest urban wealth into agriculture, such that our main concentrations of wealth – superannuation funds – have meagre agricultural investments. The likes of VicSuper’s valued presence in the sector is dwarfed by the total of foreign pension funds including Canada’s Public Sector Pension Investment Board, The Netherland’s Stichting Pensioenfonds, Switzerland’s Adveq Real Assets, the US Municipal Employees’ Retirement System, Denmark’s Danica Pension Fund and Sweden’s Forsta AP-fonden as well as other German and Scandinavian funds. There are two lessons in this: the first is the obvious one that we as a nation can invest more. The second is that we rely now, as we always have, on largescale foreign investment. Land, labour and capital are the three key factors in agricultural production. Technology can make up some deficiencies in the first two but is ultimately reliant on the third – capital. WITHER AUSTRALIAN AGRICULTURE? Looking back over the last 150 years we can see trends that inform future changes in agriscience, rural society, global and community demands, as well as apparent limitations. For example, our focus on water use may stimulate developments in northern Australia and a reduction in agriculturally marginal areas. Alternatively, such benefits might accrue from inefficient pasture irrigation being switched to intensive crops. Some even consider that landscape will be valued above agriculture and lead to perennial revegetation for extensive grazing, forestry and conservation. Whatever transpires, it is unlikely to be a continuation of the 150-year trend of exponential agricultural land expansion. It will also be integrally related to international trends. In Europe, a farmer survey indicated expectations of major changes in farming practices and structures over the coming 20 years, as shown below. A 2013 National Farmers’ Federation survey of Australian opinion on the global and domestic factors that are now driving change has found the following; population growth, urbanisation, climate change, price volatility, labour, telecommunications, R&D investment, profitability, trade restrictions, foreign ownership, urban farming, cultural changes, biofuel, economic growth, energy costs, farm social adjustment, consumer and regulations. When these factors are applied to Australian agriculture it is easy to see we require increases in agriscience, competitiveness, market access, labour availability, urban linkages, environmental practices and adaptability to change. These are consistent with the consolidated views from Europe. As we broaden our view beyond the past and look to Australia’s competi-

FARMERS CITING A TREND AS INFLUENCIAL (%)

60%

Precision Farming: will become the standard and further advance technology

44%

Automation: Automation enables farmers to manage a farm with fewer people

40%

Consolidation: the agricultural sector will further consolidate

36%

Professionalism: the degree of professionalism will increase especially on large farms

28%

Labor shortage: A shortage of qualified employees will be a major challenge in 2010

tive advantages we will also apply agriscience to existing and new industries. Some rising industries include exotic horticulture; game birds; goat and kangaroo meat; aquaculture; value-adding in the hide industry; and mechanisation in tea and coffee production. The annual value of these new and fast-growing industries is now approaching $1 billion. While absolute values are low compared to traditional industries, significant environmental benefits also accrue from industries that reduce feral pigs and camels, reafforest with native species (such as oil mallee or wildflowers) and reduce salinisation. Tourism is also associated with such new industries as truffles, olive oil, goat and sheep cheese, green tea and marron. Just as agriscience is an integrated part of the total agricultural landscape, so our future agriculture will be integrated across many business sectors. But the largest foreseeable gains will be made in our existing major industries. The Australian Academy of Technological Sciences and Engineering notes: “Australia’s agrifood industries are at an important crossroads due to a fortuitous confluence of geography and history. Do we respond to the immediate challenge of meeting the food and fibre demands of the emerging middle class of our near neighbours, who will express their new wealth in the clothes they wear and the foods they eat, or do we continue to be a price taker for bulk commodities into the future? “To meet this new opportunity the Academy identifies the need for a longterm strategy for growth and value-adding that enhances our competitive advantage in clean green food. And this relies on reinvigorating innovation through globally-linked agriscience.” Australia is in agricultural transition. Symptoms include the cost-price squeezing of farmers, increased global investment interest in reliable agricultural enterprises and ongoing social adjustments. Our long history of innovation serving adaptation to new environments, new markets and new values that has produced the miracle of Australian agriculture will serve us well as we move further into the new era.

ABOUT THE AUTHOR: Professor Lindsay Falvey FTSE was Dean and Chair of Agriculture at the University of Melbourne. He is a Director of the major Qatari-owned investment in Australian agriculture Hassad Australia, and is Chair of the Board of the International Livestock Research Institute. His PhD, higher doctorate (D.Agr.Sc.) and honorary doctorate are all related to agricultural science, technology and development. He is the author of several books and many papers on the agricultural and food processing industries.

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TELOPEA DOWNS – from desert to pasture Telopea Downs is a large area in northwest Victoria that throughout its relatively short history has benefited from major capital inputs and new technologies. It is an excellent case study on the benefits of the application of capital to agriculture, both in the past through a precursor to today’s superannuation funds, and currently through foreign investment. LINDSAY FALVEY Telopea Downs was developed after 1954 following a pattern in agriculture of constantly opening new frontiers. Having been conceived for more than a century as part of a 2.5 million hectares semi-desert straddling the South Australia-Victoria border (known as the ‘Big Desert’), the sparsely-vegetated, undulating sands attracted attention for a reasonably reliable rainfall (an average of 235mm a year). Agriscience breakthroughs throughout the preceding 20 years made development feasible – thus opening new land for agricultural development. Soil surveys of the area in the 1930s showed phosphate and nitrogen deficiencies, which led to pasture trials that showed lucerne to be the most promising crop. But production was limited by some other nagging deficiencies revealed from trace element research with pastures and sheep as copper, zinc, molybdenum and sometimes manganese. With tiny additions of these, lucerne grew better and the grass phalaris became viable. But a subsequent limiting element showed up as symptoms in sheep grazing, with a deficiency of cobalt being added to the mix. Lucerne establishment remained problematic on the deeper acid sands, but was found to be solvable by pelleting seeds with lime and rhizobium and by modifying sowing machinery. By the 1950s, this persistent innovation had provided the integrated management approach necessary to make huge areas productive. The stunted mallee scrub that required clearing was beyond 1950s labour availability, and so technology substituted for labour in the form of specially designed machinery, which meant increased investment. Australian insurance and financial services giant, the AMP Society, became the source of capital after it was granted leases in the region with the objective of developing sheep and cropping land for settlers. Farms with pasture and watering points were divided into blocks able to support 1,500 sheep. When AMP completed its job in 1974 it had developed about 47,000 hectares in Victoria, which were sold as 91 blocks, with another 78 sold in South Australia. Initially, prospective settlers provided the labour and received financial assistance from AMP, but a severe drought in 1982-83, and increased debt, soon forced many from their farms. The need for capital in larger operations led to more wealthy investors buying blocks and funding brush control and pasture establishment. As is usual, new constraints arose. These included an aphid that devastated lucerne, invasion of weeds hazardous to sheep, and rising soil acidity. These were addressed through research that produced aphidresistant lucerne varieties, judicious regimes for herbicide application, and soil liming. By the late 1980s the farmers of Telopea Downs had technologies to increase sheep production, but were now hampered by structural changes

in the Australian economy that highlighted, to different extents, the lack of capital necessary for farming such terrain. Further research revealed costsavings in phosphate fertiliser applications, but farms remained constrained by their small size and debt loads. This led to many adjoining farms being combined into much larger properties, and a rise in absentee-ownership. So far the story differs little from many others in Australia. But the tenacity of those who remained demonstrated that mixing subsoil clay with the surface sand doubled productivity for the few who could afford to employ the expensive earth-moving technologies necessary to do this. To extend this across the wide area and apply other agriscience developments again required large and patient capital. In 2010 such an investor arrived and the 47,000 hectares of Telopea Downs is now being developed to its potential. The investment by the foreign-owned Australian company Hassad has allowed new technology and expertise to be brought to the area to produce an adapted sheep breed on highly productive resilient pastures supporting five sheep per hectare. In 1886, the region required 20 hectares to support a single sheep, and even then they had to be rotated to other regions to survive. Technologies and expertise that are now being applied include: electromagnetic resonance for clay and water depth assessment; GPS machinery movements; precision soil amelioration by controlled claying; pasture renewal by wheat and barley rotations; precision application of nutrients and chemicals; remote sensing for crops, pastures and stock water; optimised pasture utilisation; national occupational safety and environmental standards; integrated pest management; welfare-sensitive drought feeders; geneticist-managed sheep breeding; ewe pregnancy scanning; and electronic sheep tagging for individual management, marketing and packaging. The Middle Eastern source of capital is also important to Australia as it comes from a major market for our produce. Such alignment of producers and consumers without middlemen offers higher returns for products in demand, in this case a sheep breed new to this region. In providing stimulating employment on productive farmland, this investment with others has reinforced the resurgence of demand for agricultural education. And new capital has flowed into the locality with an increased farm population that helps keep rural schools alive, purchases of farm inputs local and supports community activities ranging from rural fire services to university scholarships for local students. Telopea Downs is an example of the transition occurring in Australian agriculture. As technology substitutes for labour and the need for new land, capital that can engage the expertise of our agricultural education and the technologies of our agriscience is critical to our future.

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02/ESSAYS

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Reviving Australiaâ&#x20AC;&#x2122;s export markets A vibrant export trade is critical to the future of the agriculture sector in Australia. But despite success in some areas, Australia is losing ground overall, says Mick Keogh. What can be done to reverse the slide?

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ustralia is a major agricultural exporter, but we also import a lot of foodstuffs, which means Australia’s domestic markets are open to international competition. The value of global agricultural trade has grown considerably in recent years, at an average rate of approximately 8 per cent annually since 2000. For some regions of the world, such as Central and South Asia, South East Asia, Africa and the Middle East, the annual rate of growth has exceeded 12 per cent. That is much higher than the growth in most other traded commodities. But over the same period, the value of Australian agricultural exports has been increasing at a rate of only 5 to 6 per cent a year. This means that in global agricultural trade terms, Australian agriculture is losing market share. We need to redress the balance. Look at the key features of Australia’s agricultural export performance over the decade to 2014 (the most recent date for which comprehensive international statistics are available): n The total value of our agricultural exports in 2014 exceeded US$41 billion, and has been growing at an average of 5 per cent per annum over the last 15 years. n Beef was Australia’s most valuable agricultural commodity export. The average annual growth rate in the value of beef exports has been significantly higher than the overall annual growth rate in the value of all Australian agricultural exports. n The annual rate of growth in the value of canola exports to 2014 was one of the highest of any commodity, averaging annual growth of 15 per cent, although this figure was achieved off a relatively low base. This was the fastest rate of growth for any of Australia’s 15 largest export commodities over the period. n At the other end of the scale, the annual value of processed dairy products was growing at the slowest rate of any of our major exported commodities over the period. n The value of wool exports continues to decline from the high values recorded during the mid to late twentieth century. The value of wool exports has only grown by an anaemic 1.4 per cent per annum over the past 15 years. n The annual rate of growth in the value of exports of the 15 largest commodity export categories was approximately 6 per cent per annum, while the remaining commodity export categories (24 per cent of total agricultural exports) only grew in value by an average of 2 per cent per annum. There have also been a number of significant changes in the export destinations for Australian agricultural products. These include: n Nearly half of Australian agricultural exports by value are now exported to North Asia – China (including Hong Kong), Japan and Korea. n The annual rate of growth in the value of agricultural exports to the ASEAN bloc nations was higher than for any other region, averaging over 10 per cent per annum for the period to 2012. Exports to ASEAN nations accounted for 22 per cent of the total value of agricultural exports in this period. n The value of agricultural exports to the major European nations is growing at an average of just 1 per cent per annum, significantly lower than the average for all Australian agricultural export destinations. Subsequently, the proportion of the value of Australian agricultural exports destined for Europe is falling. Australia’s absolute growth in trade to Asia is masking the fact that we are

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losing relative market share. Despite the growth in value of Australian agricultural exports to these regions, other agricultural exporters are having more success at capturing these emerging markets. Brazil and other Latin American nations in particular have experienced a rapid growth in the value of their agricultural exports to these regions, as have the US, China and Indonesia. HIGHER EXPORTS, LOWER MARKET SHARE All this means that Australia, which thinks of itself as a major agricultural exporter, is losing ground. This trend needs to be reversed, and quickly, if Australian agricultural is to fulfil its promise. There are many reasons Australian agriculture has not been able to capture a greater share of the growth in agricultural trade over the past two decades. The product mix has not suited Australia. Much of the growth in agricultural trade, in Asia in particular, is in feed grains and oilseeds, both of which are used as feed for the intensive livestock (pork and poultry) and aquaculture sectors that are growing rapidly in this region in response to growing demand for protein in diets. Another problem is that Australia is running up against natural limits of growth. Australia is a large country, but there is not a lot of extra land available for cropping, and neither is there a lot of extra water. We can’t easily expand the area of our farmland, nor the volume of production. The grains sector has tended to specialise in producing higher quality milling grains, but Australia’s variable climate and limited supply of water for irrigation means that oilseed production is limited. In the past Australian agriculture has been successful in increasing the value of commodity export categories, such as canola, beef, wine, sheep meats, live cattle and cotton. All these commodity products have experienced rapid demand growth in emerging Asian markets, and Australia has some spe-

Australian agriculture is losing market share. We need to redress the balance. cific comparative advantages in their production. But overall, for a decade or more, Australia has had relatively flat productivity growth in the agriculture sector. Units of output per unit of input haven’t been increasing, which means we haven’t been finding new and cheaper ways to do things. We have not been innovating, or adding value. That has meant that our global competitors have been catching up with us in terms of their production and their capacity. The problem is made even worse by the fact that we haven’t given enough thought to what we need to do improve the situation. It should be obvious that the way to increase the value of our production is to lift the value of our products – in other words getting more value from what we are already producing. TELLING THE AUSTRALIAN STORY Australia needs to think beyond producing bulk commodities. There are very limited growth opportunities in that direction. Instead, we need to start thinking about what will appeal to the new breed of global consumers who have more money in their pockets.

Our past success has made us complacent. There is simply no reason to assume that Australia’s proximity to rapidly growing markets in Asia provides an advantage over other national agricultural exporters. Australian agriculture needs to do more – much more – to move up the value chain, and to increase the unit value of agricultural exports. That is the best way to compensate for the lack of potential to increase the volume of agricultural production available for export. That means changing our concept of value add and what it means. True value add means more than just food processing. It means changing the way animals are treated or the way crops are grown. And not only do we have to do that – we then have to let people know we have done it. There needs to be a story behind the production system – a process known as marketing.

Unfortunately, the Australian agricultural industry has done a poor job at marketing itself internationally. If you want to appeal to a wealthy consumer in China or India, it’s about more than just the quality of the product. That has to be right, but it’s also about the story behind this product. They need a compelling reason to pay more for an Australian product. It’s a lot more than branding or sticking a green kangaroo logo on everything. We need to tell a story – and Australia has some fantastic stories to tell: n Australia uses some of the lowest levels of inputs of virtually any country. We use fewer artificial fertilisers and chemicals than most other agricultural nations. n We have a very high level of biosecurity. As an island continent with strict and well enforced quarantine laws we are free of many of the plant and

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animal diseases prevalent in other countries. n We can trace and track product better than most. Our logistics systems are very good. Because of our internal distances we have to get fresh product to all corners of the country very quickly to meet domestic consumer needs. Getting it overseas is really not much more difficult. n Australia pays very high levels of wages to workers working in the industry, while many other countries are based on extremely cheap agricultural labour. Australia has the original fair trade model. This is not necessarily a disadvantage, because of the high level of skill of staff employed in the sector. All these things amount to a very strong, very positive story that should resonate with consumers who are concerned about the environment, who are concerned about ensuring people are treated fairly, and that the products that

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they are buying will not do them any harm. But we have no common storyline around all this. We need to get the message out. To do that we need a combination of things. We have to start from a factual base, but we need to build emotion into it as well. Itâ&#x20AC;&#x2122;s a combination of economics and statistics with storytelling. We need to put together a package of information about the nature of the production, the environment, and the way in which animals and crops are treated and grown. It is a very good story, but we rarely see it as a selling point. Yet at the same time we see consumer demand in places like China absolutely skyrocketing for those sorts of products with those sorts of attributes. Another problem is our lack of consistency and our failure to speak with one voice. It would be ideal if everyone who ever left Australia to sell product had the same story, that they understood it and could talk sensibly about it. The Kiwis do this very well. But we do not.

There are cultural and historical reasons why. Australia started off as six separate colonies, and whether we like it or not many of our laws and our systems are still state based. Each state has its own Department of Agriculture, and we end up with trade delegations from Queensland going to China one day, followed by New South Wales the next day and South Australia the day after that. Buyers in China have no idea where these places are, and don’t care. There needs to be a consistent message, and coordinated marketing. THE IMPORTANCE OF BIOSECURITY Australia has a very good record in disease freedom and food safety – what is usually called biosecurity. When the mad cow disease outbreak occurred in the early-2000s, Japan and Korea immediately shut their borders to any imported product from a country that had the disease. Fortunately, Australia had acted on the risk of that disease some 15 years earlier and had never had an incident, so we retained access to what are probably two of the most expensive beef markets in the world. That continued all through the 2000s when our competitors like Canada, the US, Brazil, Argentina and the Europeans were all locked out. It really highlighted the importance of the biosecurity systems we have here in Australia and the fact that we’ve been able to maintain them. We are helped by the fact that we’re an island nation, and we haven’t got porous land borders that things move across and are difficult to control, but

Australia’s free trade agreements with Japan, Korea and China are a great step forward even so we have always had a very strong focus on biosecurity. But we haven’t capitalised on it as much as we could have. We’ve had issues needing an urgent response that we’ve managed very well, such as equine influenza in horses and Newcastle disease in poultry. Our excellent biosecurity systems meant that both were quickly managed and subsequently eradicated. Food safety is also a very big issue in dairy. China has had major problems with contaminated milk, for example. Australia has a very strong record. The key is getting milk down to a safe temperature and then maintaining the cold chain right through to the consumer. That comes back to our excellent logistics. Because of the distances in Australia, we’re very good at it – after all, Australia invented refrigeration for meat export. So how do we gain better access to foreign markets? Are bilateral or multi-lateral free trade agreements enough, or should we be doing more in terms of government or industry initiatives? Australia’s free trade agreements with Japan, Korea and China are a great step forward. We never got far with multilateral trade agreements in the World Trade Organisation. But rules can be modified and conditions can shift. There is a need for constant vigilance on how those systems are working and the specific rules that need changing or modifying. And once your product is in that market and consumers get a taste for it, there is a much lower propensity for governments to then subsequently restrict it, because it is then a political issue in the home market as well. Once you get your foot in the door, you can build greater momentum and greater access to that market over time.

ADDING VALUE Australia has very good technologies in food processing, which also means opportunity. In many cases our production systems at the farm level are unique. For example, our sheep and cattle industries are based on grazing, and our broad acre cropping industries are almost entirely rain fed. When you look around the world, those production systems aren’t all that common. Globally, irrigation is much more common. The main sources of protein are aquaculture, pork and poultry, not grass-fed sheep and cattle. Some of the African and South American countries have similar production systems, but not so much in Asia where pork and poultry are the main sources of protein. And it is not just product. Some of the technology and expertise we have here is very good and exportable to those nations. Australian farmers are very big users of technology, which helps their productivity enormously. We’ve been driven to it because wages are quite high in Australia, so there’s quite a strong pressure to substitute away from labour and use technology wherever you can. Australian farmers are quite technology savvy, compared to some of their counterparts internationally, and that has been a big focus on the way production systems have evolved here. Crop farms in Australia are generally many times larger and produce many more tonnes of grain than what you see in international farms, and that’s partly as a consequence of technology. As we improve technology, does price become less important as a buying factor? We had the example of the pork industry selling premium priced and quite expensive pork into China and the fact that it becomes very much a question of quality rather than price. We are seeing this happen in some of our production sectors, but it needs to happen a lot more. It is least evident in grains and oil seeds, because predominantly they reach the consumer as a processed product. Consumers don’t get to see where it comes from, and they’re probably not very interested anyway. But when it comes to red meat and many horticulture products, there’s a great deal of interest in where it came from, who produced it and how it was produced. That creates an opportunity for premium products in those markets. It’s not a one size fits all, but certainly in the livestock industries and in the horticulture sector there are real opportunities, and also in fibres, such as wool and cotton, where there are opportunities for premiums based on our quality. Australian agriculture has wonderful opportunities globally. But we need to change our way of thinking, and the way we address those opportunities. Nothing less than the future of Australian agriculture is at stake.

ABOUT THE AUTHOR: Mick Keogh is Executive Director of the Australian Farm Institute, an independent policy research institute that conducts research into strategic policy issues of importance to Australian agriculture. In 2016 he was named the first ever Agricultural Commissioner of the Australian Competition and Consumer Commission (ACCC). He has also been chairman of the National Rural Advisory Council (NRAC), a statutory body which provided advice to the Minister for Agriculture, Fisheries and Forestry, and is a member of the CSIRO Sustainable Agriculture Flagship Advisory Committee.

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02/ESSAYS

Pistons of prosperity In the second half of the nineteenth century Australia became the most prosperous land on earth, propelled by natural resources and new technologies. GEOFFR E Y B L A I NE Y examines the changes that made Australia the country it is today.

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n the half century after the start of the gold rushes, economic progress in Australia was swift. In 1890 the population reached three million, having been multiplied by seven in forty years. Parliaments, juries, and free institutions had taken root in a land which back in 1850 still received British convicts and still bowed, on most major issues, to decisions made in London. The new machinery and the gadgetry of ease could be seen everywhere – in the railways that stretched far inland, the tall blocks of offices in larger cities, the ships and cranes at the wharves, the gasworks and refrigeration chambers and the hydraulic power which propelled the passenger lifts to the upper floors of the new hotels. An unusual blend of circumstances had created this age of prosperity. Perhaps the strongest piston of prosperity was the abundance of new natural resources. Australia’s pace of development owed much to the wide grasslands, the virgin soil ready to grow cereals, the untapped deposits of gold and copper, coal and tin and silver-lead, and to the forest which yielded building materials and firewood. Here was a bonanza, and most of its choicest parts were used for the first time between 1840 and 1890. These natural resources had been little used in the Aboriginal epoch but in the half century to 1890, they were exploited, often with energy and ingenuity. Rarely in history had people explored, occupied and used such a vast terrain so quickly. The strenuous application of new techniques was possibly the second piston of the long era of prosperity. Much of the prosperity came from fatter cattle and heavier fleeces and more appropriate breeds of wheat. It came from hundreds of labour-saving devices, from the post- and-rail fences which replaced the shepherds, from the wire fences which replaced post-and-rail fences, from the corrugated iron spouting and water tanks, from the artesian bores and the creaking windmills which supplied underground water on the plains, and the new irrigation schemes of the 1880s. Fewer hands produced more wheat because of the devising of new ploughs, strippers, mechanical harvesters and the travelling steam threshing-machines. At harvest time, in the kitchens of the larger farms, the dining table seated perhaps only ten men where once there were thirty, and those ten men with the aid of horsepower and steam power did more work each day than the vanished team of thirty. THE RISE OF THE MACHINES Almost everywhere steam was doing work which was once performed by the sheer physical strength of teams of workers. Visitors to the mills and factories saw the steam or smoke from a distance, heard the throb of the pistons and crushers and mills, and once inside they saw a criss-cross of overhead belting which conveyed the energy from the working engine to the scattered machines. Those who did not visit factories knew, from the advertisements in newspapers and the painted signs on delivery carts, that this foodstuff or that commodity was now miraculously made by labour-saving machines driven by steam. Eat our steam biscuits. Take your suit to our steam laundry. Most steam was produced by firewood in the interior or coal on the coast, and nearly a thousand ships a year by the 1880s carried the coal away from Newcastle. There on the crowded wharves the handling of the coal was increasingly mechanised, as readers of A New Geography for Australian Pupils learned in 1885: “The noise is stunning, for yonder come trucks of coal running down to the edge of the water. Great cranes seize them, whirl them into the air, swing them over the hold of the vessel, turn them upside down, and so empty coal into the ships below.” Transport had been transformed since 1850. In that year many travellers

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had to walk long distances, the roads were poor, and strong horses were few. Even the horse-drawn mail coach did not make long journeys. The strength of the wind was far more important than the steam engines in propelling ships and not one mile of railway was open. By 1890 the fast steamship dominated the passenger routes to Europe, and the long and often-stormy voyage past Cape Horn had given way to the calmer passage across the Indian Ocean to the Suez Canal and the Mediterranean. The international telegraph had replaced the mail steamer as the fastest way of sending important news, and the mail steamer itself was twice as rapid as the fast sailing ships of 1850 in crossing the world. Within the larger cities the trams, trains and cabs provided cheap and regular transport in streets where, in the late 1840s, nearly everybody walked and only the wealthy could call on riding horses or a horse and carriage. And in capital cities the first telephones were installed in the decade 1878 to 1887, though calls outside the city were still impossible. Mechanised transport now saved human labour on a huge scale. In a continent possessing few navigable rivers and no inland canals, the railway was the great miracle. It filled old pioneers with wonder. Whenever a new railway was opened, old settlers were there, sitting stiff-backed on the platform amongst the top hats, and reminiscing how they had been amongst the first white men to ride through country where the black locomotive now rushed. When the railway between Melbourne and Sydney was completed in 1883, and a banquet of food and speeches was set out in the locomotive shed at Albury, the new Edison electric light shone on an old man who had crossed the silent Murray in 1824 with the explorers Hume and Hovell. The sense of wonder at the railway comes down clearly over the years. But the wonder was not simply at its speed and its predictability. The railway so cheapened the cost of transport that it created industries where previously there were none. It gave birth to distant wheatlands and new dairying districts, and opened forests to the timber-miller. The railway enabled low-grade or remote mining fields to treat ores which, without a railway, were unpayable. It saved pastoral districts in time of drought and sent their wool quickly to market. Between 1875 and 1891 the railways grew from 1600 miles to more than 10,000. There were also gains from using ancient modes of transport more effectively. Draught horses of improved breeds replaced bullocks on most farms and farmers used large teams to pull the plough, thus reducing the labour costs for each acre. In the dry outback the camel was introduced at first by explorers and then by carriers. Sir Thomas Elder, a rich pastoralist, imported 124 camels and 31 ‘Afghan’ camel men in 1865 from the port of Karachi in the present Pakistan, and the pack camels increasingly became carriers of wool, station supplies, mining equipment and food and alcohol In the dry outback. At one time half of the continent and its sparse, struggling population relied on pack camels. LET THERE BE LIGHT In 1850 the central streets of only one city, Sydney, were illuminated by gas lamps, but by 1890 most towns of a few thousand people were lit by gas. In smaller towns the household lamps burning kerosene – a word coined in 1854 – supplanted the old tallow candles in the sitting room. A whole range of night meetings and activities had become more convenient, night work had become safer, and in most houses people could read or sew at night without undue strain to their eyes: gaslight and kerosene lamps were thus the allies of compulsory education.

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We had our own inventors, mostly men of little schooling who fastened their mind on new problems and would not let go. In the farmlands, hundreds of part-time inventors devised new or improved old machines. South Australians between the 1840s and 1870s invented a range of simple and effective machines which prepared and tilled and harvested the wheatlands with more speed and less labour. They invented the stripper which, drawn by horses through the tall wheat crop, combed the wheat from the stalk and partly threshed it. They invented the Mallee roller which rolled over the Mallee scrub and so saved much of the slow work of using the axe or the grubber. They invented the stumpjump plough which neatly jumped over buried roots still left in the roughly cleared ground. They devised and manufactured, at small foundries and the wayside shops of implement-makers, the ploughs and the drills which were more suited to hard dry soils than the damp soft soils which their European ancestors had farmed. Victorians in the 1880s led in developing the combine harvester. In the slow evolution of this machine which now harvests much of the world’s wheat, Australians contributed the most. Even in those problems which European inventors were facing, Australians working patiently in isolation still had hopes that they would transform the way the world did its work. In Geelong the newspaper editor, James Harrison, was a brilliant pioneer of mechanical refrigeration but was almost too far ahead of his time. His important cargo of hard-frozen meat was shipped to London in 1873 in the sailing ship Norfolk, which possessed no refrigerating plant and so could not adequately preserve the meat. In the 1870s a young Melbourne watchmaker, Louis Brennan, invented a retrievable torpedo which he eventually sold to the War Office in London for the huge sum of £110,000. In Sydney in 1893 Lawrence Hargrave, son of a Sydney judge, made a vital step in aeronautical engineering when he invented the box-kite, thus advancing knowledge of the vital question of how a flying machine could be made stable while in flight. And a decade later the young Melbourne engineer, A.G.M. Michell, was working on his revolutionary device, the thrust bearing, without which the huge ocean liners and oil-tankers would be impracticable. A willingness to use and experiment with machinery was thus one of the causes of the high standard of living. A large volume of commodities produced by few hands: that was the secret of colonial Australia’s prosperity. In turn the willingness to import machines or even invent machines was spurred by the frequent shortage of labour and the abundance of capital. British capital financed much of the mechanisation, including the railways. THE COLONIAL LEGACY Other factors promoted the prosperity of Australians. The years 1850 to 1890 were unusually peaceful; Britain fought in only one major war, the Crimean War of 1853 to 1856, and the war was short and victorious. All the dislocations of a major war were thus avoided. Moreover in this long period most of the expense of defending Australian ports and sea lanes was still paid by the British taxpayer: ironically Britain collected an income tax but no Australian colony tried to collect an income tax from its citizens until the 1880s. Economic life experienced boom after boom, and after each boom the slump was short. Tasmania was the main exception, and was relatively stagnant from the 1850s until the early 1870s. The absence of major economic slumps is one of the unusual facets of the period, and part of the explanation is simply luck. The banks possessed, if a crisis should arise, no central bank and no emergency legislation to help them through the troubles; and yet somehow until

the 1890s the network of banks was spared the panics of depositors and those financial nightmares which were felt In England, France, Germany, Austria and the United States in almost every decade. The willingness of the colonial governments to spend money on public works in lean years and the willingness of British investors to lend that money at low interest also helped to give economic life an unusual level of stability. Above all, gold was a wonderful insurance in economic life. Whenever the economy began to slump, the search for gold and the mining of gold were intensified. The price of gold was fixed internationally at £3.17s an ounce and so gold was attractive when the price of wool, copper, wheat, or other exports declined. Gold was ballast in the storm: it provided stabilisers for the ship. One spur to the high prosperity was not appreciated at the time. From the late 1840s to 1890, the main rural districts experienced favourable weather, measured against the following half century. We are only now beginning to realise how favourable was the climate in the south-eastern corner of Australia for those grazing and cropping industries which were so important then to economic life. In good years in the far outback, pastoralists were tempted into country so poor that in the end they had to retreat. In vast expanses of poor land too many sheep and cattle grazed, and the pastures and the scrub deteriorated. Railways were built to districts which did not have enough traffic – and never would have enough – to pay for them. Breakwaters and stone harbour works and long piers were built for ports which then faded away. Permanent towns were built on gold-fields and then the gold ran out, leaving fine churches, schools, banking chambers, shops and even town halls to serve only a fraction of the people for whom they were

built. Noxious weeds and pests were introduced and flourished, wiping out part of the hard-won gains of pioneers. The forty years had been blessed by an unusual assortment of advantages. We had virgin soil, rich mineral deposits and many untouched natural resources to reward the first comers. We did not have to depend on one dominating export, and so we did not stumble if the price of that export fell. We were quick to adopt or adapt the new ideas of a great era of invention in the North Atlantic. We were at peace with the outside world, and in the more populous parts of the country the weather was relatively favourable. Throughout the forty years the world’s richest money-lender, Great Britain, sent out capital, enabling us to enjoy a high standard of living at the very time when we were spending heavily on railways and reservoirs, on opening up the land, the building of towns and a variety of debt-incurring works. Through hard striving by people in every section of society and through an unusual combination of conditions the country had achieved much. But now the striving in boardrooms and in offices as well as on workfloors was easing a little, at the very time when the other advantages were falling away. And the pride in the forty years of achievement was itself an increasing hazard, because serious setbacks were virtually unimaginable and therefore would be more damaging when eventually they came. Extracted with permission from A Land Half Won (Macmillan, 1980). ABOUT THE AUTHOR: Geoffrey Blainey is probably Australia’s best known historian. He has written over 35 books, including The Tyranny of Distance, A Short History of the World, and The Rush that Never Ended. The National Trust lists him as one of Australia’s ‘Living Treasures’.

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02/ESSAYS

The future of Australian agriculture Leading Australian forecaster and futurist PHIL RU T HVEN says Australian agriculture is entering its fourth era, when the declines of recent years will be reversed with new technologies and a new business model. Australia’s rural population and economy once dominated the nation’s landscape. Agriculture was the nation’s largest industry for well over a century and a half from the early days of the colony of New South Wales in 1788 until the outbreak of World War II. But now it is less than 3 per cent of our economic output. The inland population – mostly rural – was also dominant for a very long time, accounting for 61 per cent of the total population at the time of federation in 1901. But when Australia entered the 21st century it stood at just 17 per cent, heading for 10 per cent or less by 2050. What lies ahead for Australian agriculture in the 21st century? Further decline, or a renaissance?

point in its evolution. A top-down view of Australia’s agricultural industry expressed as a share of Australia’s gross domestic product (GDP) is enlightening. The industry has passed through three cycles, or eras, each lasting around 75 years. Now it is entering a fourth phase. Wool and other livestock products dominated the first era, wheat and wool the second era, and crops, livestock and fishing the third. Each era has seen greater output with less physical effort, improved productivity made possible by technological innovation and considerably more capital.

ERAS IN AUSTRALIAN AGRICULTURE Value added share of GDP (%)

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2050

2020

2010

2000

1990

1980

1970

1960

1950

1940

1930

1920

1910

1900

1890

1880

1870

1860

1850

1840

1830

1820

1810

1800

Share of GDP (%)

ustralia’s agricultural endeavours have seen the best 1st Era 2nd Era 4th Era 3rd Era of times and the worst of times many times over since 50 the start of Australia’s modern era in 1788. 45 In the more than two-and-a-quarter centuries since then, 40 agriculture as an industry has been continually impacted by 35 changing product mixes, weather, pestilence, technology, availability of capital, fluctuating commodity prices, economic 30 booms and busts, shifts in our trading partners and other chal25 lenges. Long term planning has often been a nightmare. 20 Many early farmers were convicts freed on tickets of leave 15 from Governor Philip Gidley King in 1801. They were encourSECTORS: Agriculture F2015: aged to move into farming, presented with land and maybe a Aquaculture Revenue ($bn) 74 10 Forrestry & Logging Businesses (*000) 145 cow, basic tools such as an axe and shovel, and a wife from the Fishing, Hunting & Trapping Employment (*000) 323 5 Support Services woman’s prison – the Parramatta Female Factory. 0 The most important ingredient in this mix was good luck. Rather than being capital intensive, it was people intensive. SOURCE: IBIS WORLD 07/01/15 Some made it, many didn’t. Today, the average value of an agricultural business in Australia is around $2.5 million with an average revenue of less than $500,000. Average profitability is low, just several per cent of equity in Today, the agricultural industry contributes just 2.3 per cent of the namost cases. Agriculture is now very capital intensive, and often not attractive tion’s GDP compared to the 50 per cent it provided in 1820. Our mining industo the sons and daughters expected to take over what is still in many cases try is three times larger than the agricultural industry, entering a new exciting the family business. era in the 1960s and again in the early 2000s. The disposition of industries in That means that Australian agriculture is at yet another fascinating turning Australia in 2016 is shown above.

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AUSTRALIA’S INDUSTRY MIX Share of GDP, in F2014 price terms Year to June 2016

Personal & Other Services 1.8% Agriculture 2.1%

Health 6.5%

Cultural & Recreational Services 0.8%

Mining 8.9%

Hospitality 2.4%

Manufacturing 6.0%

Education 4.7% Utilities 2.7% Construction 7.7%

Industry Taxes 6.5%

Wholesaling 4.0%

Government Admin. 5.2% Admin. & Support Services 2.6%

Retailing 4.5%

Transport 4.6%

Prof. & Tech Services 5.8%

Info Media & Communications 3.8%

Ownership Dwells 8.6%

Finance & Insurance 8.8%

Rental, Hiring & Real Estate 2.9% GDP $1669 billion Note 1: Less subsidies, but includes stat. discrepancy (0.2%)

SECTORS:

Primary

Secondary

Tertiary

Quaternary

Quinary

ABS 5206-6B IBISWORLD 06/10/16

AGRIBUSINESS The forecast composition of the agricultural industry in 2017 is shown in the chart on the next page. Grains, animals and edible animal products account for nearly 60 per cent of the total revenue. It was once said that the Australian economy rode on the sheep’s back. While this was a slight exaggeration, it is sobering to see that wool nowadays is less than 5 per cent of agricultural output and a mere 0.7 per cent of Australia’s total revenue. Fishing and aquaculture are likely to overtake wool’s importance in the near future. The growing importance of meat products can be attributed to the emerging wealth of Asia and its increased desire for beef, pork and lamb. Over 80 per cent of our agricultural exports now go to Asia. Agriculture is now a comparatively small contributor to the nation’s economy, revenue and trade. But there is an enormous amount of value added. An examination of the total input-output chain from agriculture to end con-

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sumer both inside and outside Australia shows that the contribution to the economy by rural produce is far greater than farm gate revenue, as the next chart reveals. Farm gate revenue of $61.5 billion, with value-adding along the chain, results in a massive $493 billion by the end of the production process, which accounts for nearly 10 per cent of Australia’s expected $5 trillion in revenue in 2016-17. The total value added to the economy along the chain more than quadruples from the agricultural industry’s 2.1 per cent of GDP to around 10 per cent. This chain is often referred to as “the agribusiness chain”. The term arose as participants recognised the interconnectivity of the many sectors involved in agriculture and addressed the need for efficiencies and logistics along the chain. With the end of the industrial era in the mid-1960s came a new age of the economy at large, and along with it a new set of rules. Immense buying power emerged at the consumer end of the chain as the world became a consum-

TOTAL VALUE OF AUSTRALIAâ&#x20AC;&#x2122;S AGRICULTURE AND FISHERIES (2016-17 ESTIMATE, $m)

Fisheries & Aquaculture $3,079 Cereals $10,168

Livestock Product (Eggs, Milk, etc.) $7,760.00

Oilseed $2,116 Pulses $1,470

Other Livestock $4,358

Industrial Crops $4,705 Sheep & Lambs $3,836

Fruit & Nuts $4,200

Vegetables $3,600

Cattle & Calves $13,217

Horticulture & other Crops $2,965

THE AGRIBUSINESS CHAIN F2017 (E)

Services to Agriculture

$5.9 billion

Agriculture (Inc. Fishing)

$61.5 billion

Imports

Education, Financial Services etc.

$19 billion

Manufacturing

Wholesaling

Retail

$108.7 billion

$97.3 billion

$137.5 billion

Packaging, Utilities, Transport etc.

Input-Output Chain Revenues

$493 billion

Hospitality & Institutional

$63.1 billion

Exports

$44 billion

SOURCE: IBIS WORLD INDUSTRY WIZARD 10/10/16

er-oriented economy and society, replacing the production-oriented and consumer-subservient one that had previously existed for centuries. This impacted heavily on agriculture, which, in terms of power, then became the end of the chain rather than the beginning. The value-adding at the manufacturing point yields a revenue of $108.7

billion in 2017, broken down as shown in the next chart. Meat and meat products, including those exported, are the largest segment. Milk products and sugar are significant as well, and also mostly exported. But imports are growing in some sectors where Australia is no longer competitive due to its high standard of living and consequentially high labour costs.

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AUSTRALIAN FOOD MANUFACTURING F2017 (E) (% of total basis)

Other Foods 5.4%

Seafoods 1.4%

Oils & Fats 2.6% Fruit & Vegetables 5.1%

Meat Products 29.5%

Flour & Cereals 5.9%

Bread, Cakes & Biscuits 7.8%

Milk/Cream 1.7% Butter et al 5.7% Milk Powder 1.0% Cheeses 2.5% Ice Cream 1.1% Liquor 11.2% Milk Products 12.1% Wine 5.7% Beer 5.0% Spirits 0.5% Sugar 8.9% Beverages 10.1%

REVENUE $108.7 billion

Soft Drinks 4.0% Fruit Juices 0.8% Water 0.7% Tea & Coffee 4.7%

SOURCE: IBIS WORLD INDUSTRY WIZARD 10/10/16

At the consumer end of the chain, one new age phenomenon has been the increased outsourcing of household meal preparation. As shown in the next chart, food hospitality in 2017 is likely to be an astonishing $63 billion business – and still growing strongly. This can be partly attributed to fast-growing inbound tourism. But at the consumer end of the agribusiness chain, it is the immense power of supermarkets that has reverberated up the chain to wholesalers, manufacturers and farmers. The charton the next page shows this concentration in buying power, made even more solid by an effective duopoly (Woolworths and Coles) that has only recently been challenged by a third international operator (Aldi). High labour costs and blowtorch buying power at the end of the agribusi-

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ness chain are having a game-changing impact at the beginning of the chain, the farm. Size, productivity, innovation and marketing are now conditions for survival in agriculture. Today, corporate agriculture is on the rise – currently around 20 per cent of the industry’s revenue – and slowly displacing the old cottage industry farming which had served society so well for centuries. And things are stirring as a result. Australia’s exports of rural produce have begun to grow as a share of all exports, as shown on page 72, despite an overvalued dollar for much of the last four years. Uplifts like this have happened before, but there is a sense that this time it could be more sustained, potentially signalling the beginning of a new era.

FOOD HOSPITALITY F2017 (E) (% of total basis)

Other Foods 5.4%

Seafood 1.4%

Social Clubs 6.5%

Cafes & Coffee Bars 8.7% Fast Food, Takeaway 30.6%

REVENUE $63.1 billion

Catering 10.8%

Pubs, Bars & Nightclubs 19.4% Restaurants 20.9%

AUSTRALIAN FOOD RETAILING F2017 (E) (% of total basis)

Other 4.3% Liquor 7.6%

Meat, Poutry & Fish 4.8% Bread, Cakes & Stores 0.6% Fruit & Vegetables 2.9% Convenience Stores 3.3%

REVENUE $137.5 billion

Supermarkets 76.5%

SOURCE: IBIS WORLD INDUSTRY WIZARD 10/10/16

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IMPORTANCE OF RURAL EXPORTS share of total exports F1970-2016 50 45 40 35 30 25 20 15 10

Rural Exports in this chart include processed rural produce; otherwise <5% of total exports

2025

2023

2021

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1993 1995

1991

1989

1987

1985

1983

1981

1979

1977

1975

1973

1971

1969

1967

1965

YEAR ENDED JUNE SOURCE: ABS 10/10/15

REGIONAL PERSPECTIVE AND CHALLENGES The term food security is used frequently when debating the future of the Asia Pacific region and the determination of its most populous members, headed by China, to be adequately fed throughout this century and into the next one. Already there is considerable interest in Australia’s existing rural businesses and potentially massive future agricultural investment opportunities. Much of this interest is from China, the world’s most populous nation and

soon to be its biggest economy. China already accounts for over half the GDP of our own Asia Pacific region. Australia, as we know, is a very large nation in area. But it is sparsely populated, the seventh least densely populated of the world’s 230 nations. Australia has 33 per cent – one third – of Asia Pacific’s 21 million square kilometre landmass with only 24 million people in it. China has a slightly larger land mass (41 per cent of the total) but with almost 60 times Australia’s pop-

ASIA PACIFIC ARABLE LAND% of total basis

Others 9.5%

Phillipines 2.0% Thailand 5.3%

2.7 million sq.km

Myanmar Vietnam Malaysia Laos Cambodia NZ PNG

Australia 17.5%

China/HK 53.2%

Indonesia 7.5% Korea 1.5% Japan 1.5% Taiwan 2.0% SOURCE: CIA

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ASIA PACIFIC RENEWABLE WATER

China 23.3%

Others 33%

Singapore 0.0% Vietnam 7.3% NZ 3.2% Burma 6.6% Cambodia 3.9% Laos 2.7% PNG 6.6% Others 0.7%

North Korea 0.6% Japan 3.5%

South Korea 0.6%

Korea 1.2%

Phillipines 3.9% Indonesia 23.3%

12.2 ckm total

Malaysia 4.7% Thailand 3.4% Australia 3.3%

ulation. Our next door neighbour, Indonesia, is the third largest in the region (8 per cent of the landmass) with around 260 million people, or over 10 times Australia’s population. In the open world of the 21st century, with bilateral and multilateral free trade agreements abounding, instant digital communication and a search for harmony and fairness, Australia is faced with a seminal challenge: what role will our agriculture play in the Asia Pacific region, or even the Asian mega-region that includes the Indian subcontinent? One of the starting points is arable land. Australia has a much smaller share of Asia’s arable land than it does Asia’s total landmass. We have just 17.5 per cent of Asia’s arable land, as the chart on the next page shows, and that is a major limiting factor. Agriculture needs not only arable land (or, in its place, manmade subcultures such as hydroponics and aquaculture) but also water and sunshine. Where does Australia stand regarding renewable water? Unfortunately, the availability of water further limits Australia’s capacity to play a big role in the food security challenge: we have just 3.3 per cent of the region’s renewable water. But we can help with the food security challenge, especially when it comes to livestock, fish, grains and other selected crops. Australia increased its physical output fivefold in the 20th century, exporting over a third of its food. And we can do the same in this century, too. We can perhaps do even better and move towards exporting well over half our output. But there is another important issue: 60 per cent of Australia’s water is in

NOTE 1: Renewable water, essentially rainfall plus neighbouring nation source destination

the top one-third of our continent. That is where we will have to go to increase our output. That, or capture the water and pump it south. We may have to do both. Already, foreign investors are looking at investing over $1 billion in the next stage of the Ord River development. An even longer-term question is whether we can use technology to create more arable land and recyclable water and further assist with global food security. Maybe. TRADITIONAL FARMING AND PROFITABILITY Add to this scenario uneconomic-sized holdings, low profitability and reluctant heirs to the farm and we have serious questions as to the viability of the sort of farming economics that have prevailed in Australia for a very long time. We have to ask whether the traditional model will be profitable in the future, and whether that sort of farming has the solutions for modern food security challenges. In colonial days farmland was cheap or even free, and there was very little farm equipment available for purchase. That meant there was little debt incurred when starting a farm, and any profit that resulted made farming a good business – except when there were droughts, floods or other setbacks. Today it is very different. Total assets in agriculture, fishing and forestry are approximately $434 billion, creating revenues of around a fifth of that, $88 billion. Net profit in 2016 was just $13.4 billion, a return of just 3.1 per cent on assets employed, or 3.6 per cent on net assets (equity) after debt.

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A U S T R A L I A ’ S T H R E E G E O G R A P H I C A L Z O N E S (population in equal land masses)

Top 1/3 4.4% Population

1.0 million people 82.9% of State

Northern Territory

5.4% of State

4.1 million people

12.5% of State

17.1% of State

86.3% of State

Western Australia

Queensland

1.3% of State

0.3% of State

Middle 1/3 17.9% Population

South Australia 99.7% of State

17.9 million people

New South Wales

Victoria

Bottom 1/3 77.7% Population

A NEW AGRICULTURAL ERA FOR THE 21ST CENTURY Australia needs a new type of agricultural industry, one that is different, faster growing, more profitable and deepening its Asian focus. The old agricultural industry simply isn’t working well anymore, as evidenced by sectors that have already transitioned into the new era and are doing well. And there are a growing number

SOURCE: IBISWORLD, ABS AND MAPSQM.COM19/02/13

Tasmania

This is a terrible rate of return, the lowest in the private sector of the economy, and has been for many decades. The two charts below show huge assets in the industry offering little return, even with capital gains included. This is not a sustainable situation, especially with an ageing farm-owner profile and offspring reluctant to inherit the farm as a means of living when they can earn far more, with or without tertiary education, in other industries and in the cities. It has long been said that farming is a way of life rather than a business. But old habits die hard. The older you get the harder it is to change tradition, and a lot of farmers are older than the average age of owners of other small-to-medium businesses in the economy. Farmers are a tough, resilient

and determined group, but the risk is that traditions get mistaken for values. Traditions, comfortable as they might be, are really ingrained habits with a long-passed use-by date. And habits are rarely values to begin with. The wife of a fourth generation northern Victorian farmer once told me on ABC’s Country Hour program that she loved her husband and their four children, but that they had not had a holiday for years and couldn’t afford a lot of things taken for granted by most households. She explained that she hadn’t realised when she married her husband that he was already married – to the farm! Without thinking, her husband had privileged the generational ownership tradition over the generation that was alive today: his wife and children. Hopefully, for the sake of his family, he has now got his value system in order. Which leads to what a new era in agriculture might look like.

of these. Adaptation isn’t only possible; it’s necessary. Gradually, the foundations are being laid for the emergence of a modern agricultural industry. The acid test for the birth of a new era in an industry is that changes happen across five factors: markets, products, geography (locations), systems and technology and ownership. Changes are now starting to happen in each of these areas: NEW MARKETS The new market is clearly the Asia Pacific region. It already produces a third of the world’s GDP, and is its biggest and fastest growing

A G R I C U L T U R A L A S S E T S t o t a l a s s e t s a n d d e b t 600 550 500 450 400 TOTAL ASSETS

$ billion

350 300 250 200 150 100 50 0 -50

DEBT

-100

YEAR ENDED JUNE SOURCE: IBISWORLD/DX 10/10/16

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2020

2019

2018

2017

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

1985

1984

1983

1982

1981

1980

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A G R I C U L T U R A L R E T U R N S N P A T & C a p i t a l G a i n s r e t u r n o n e q u i t y ( % ) 20 Clearly agriculture, in business terms, is a property speculation asset rather than an economic production asset

18 16

Average Net profit/equity 2.3% pa Average Capital gain/equity 3.6% pa Average Total Return/equity 5.9% pa

CAPITAL GAIN (% OF NET ASSETS)

12 10

$ billion

8 6 4 NET PROFIT (% OF NET ASSETS)

2 0 -2 -4 -6 -8

2025

2024

2023

2022

2021

2020

2019

2018

2017

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

1985

1984

1983

1982

1981

1980

-10

YEAR ENDED JUNE

region. By 2025, Asia Pacific will be bigger than the two regions that have historically been our biggest markets: Western Europe and North America. With the strengthening of the Asia Pacific region, we are now in a place to act largely within in our own economic, social and geographic home region. The Asia Pacific region is growing at twice the global average for GDP and accounts for three quarters of our trade, immigration and tourism. It is our new and exciting market for the 21st century and beyond, right in our backyard. NEW PRODUCTS The product mix is changing away from livestock to new grains including oilseeds, rice and others, and to more energy- and other input-efficient products including poultry, seafood and others. Red meat and milk products have remained mainstays for the new marketplace despite their inefficient conversion of inputs due to the growth of more middle-class households in the region that want such products. There are opportunities emerging in selected grains and grain legumes, floricultures, molluscs and crustaceans, undercover fruit and vegetable growing, wine and more. NEW TECHNOLOGIES New technologies have been developed to assist agriculture and the agribusiness chain, and more are on the way. Improvements have been made in: the practices in water husbandry, dry land farming, hydroponics, fish farming and aquaculture, the dominance of man-made forests over native ones, laser levelling, varietal development and biotechnology (genetic engineering, tissue culturing, hybridisation, etc.). GEOGRAPHY In terms of geography, the industry is moving to the north for water and sunshine and to be closer to our trading partners via northern ports – existing ones and those yet to be built. Queensland, the north of Western Australia and the Northern Territory are clear winners in this indus-

try’s locale migration. OWNERSHIP In terms of ownership Australian agriculture is following our mining industry‘s lead, just half a century later. It is moving towards corporate and foreign ownership (especially from within China) that is often prompted by food security concerns. Corporatisation is already firmly established in cotton, poultry (both eggs and meat), seafood aquaculture, fruit and vegetable hydroponics, beef (feed lots) and other sectors. There is a shift from land ownership towards leasing and renting from specialised property trusts, the subcontracting of agricultural services, contract supply of agricultural produce to local and overseas food processors, and the development of franchising. It is a brave new world, as they say. It is scary and exciting at the same time. Australian agriculture has wonderful opportunities available with the embrace of the new era. ABOUT THE AUTHOR: Phil Ruthven AM is chairman of IBISWorld, an online business information and forecasting firm specialising in industry, market, procurement and business environment information. He started the business in 1971 and it now operates in the USA, Canada, the UK, China, Indonesia and Australia, with expansion into other countries planned in the future. He has been a keynote speaker at congresses, conventions and seminars for 40 years and writes for a national newspaper, business magazines and online websites. He is an adjunct professor at the UTS, an advisory board member of the ANU Business College and a past board member of CEDA, the Melbourne Institute and various charities. Phil is noted as a long-range forecaster in areas of economics, social trends, political directions and world affairs. He was awarded an Order of Australia honour in 2014 for his contribution to business and the community.

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02/ESSAYS

Funding our farmers While we may think of the energy and manufacturing industries as the capital intensive consumers of financial markets funds, farmers have required extensive financial assistance since the earliest days of colonial settlement. S IM ON VILLE looks back at the intertwined history of the financial and agricultural industries.

armers’ financial needs have always been varied, from long-term capital investment (for land clearing, irrigation, building works, stocking and machinery), to medium-term assistance during cyclical downturns, and short-term trade finance to cover the seasonal lag between cropping or shearing and the sale of the commodity in overseas markets. Lending to farmers has always been considered a risky proposition. The remoteness of farms, the need for specialist knowledge and the volatility of the market and climate have all discouraged lenders. Despite this, Australian farmers have proved to be highly successful, helping to drive the country’s economic development through the bountiful exports of many commodities – particularly wool, wheat, meat and dairy. Behind each of these success stories is a history of sustained high rates of investment: in the nineteenth century, annual capital formation in farming represented a quarter to a half of national totals, a share surpassed only by that of residential building. After Federation and the ensuing expansion of manufacturing and services, farming’s share of national capital formation fell back to around 15-25 per cent. Intergenerational reinvestment – profits being literally ploughed back – has importantly served the expansion of many family farms over long periods of time. Nonetheless, the support of Australia’s capital market institutions has been of lasting significance in shaping our farming sector across two centuries. SETTLEMENT OF THE LAND The earliest rural settlers were squatters who benefited from claiming, without charge, Crown lands on which they placed sheep – self-reproducible capital that grew in numbers naturally and rapidly. However, for the squatters these apparent benefits were also challenges. They needed to build paddocks to contain their increasing flocks, a risky expenditure given no guarantee of land tenure. Larger flocks also necessitated looking beyond local markets to sell their wool at a time when London was the principal international auction centre for wool. British banks had begun to arrive in Australia by the 1830s – including the Bank of Australasia in 1835 and the Union Bank in 1837 – bringing with them access to British funds and mobilising local capital through branching and deposit-taking. While providing short seasonal accommodation for farmers, hopes for longer term support for capital investments were dashed by the introduction of conservative banking regulations in the 1840s as a sober re-

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sponse to the alleged wild economic speculations of previous decades. These measures restricted lending against property, limiting the ability of banks to support rural development through long term loans. Help was at hand. A series of legal reforms brought squatters within the law. In 1836 squatting was legalised in return for an annual licence fee. The more vexing question of security of tenure was resolved in 1847 with pastoralists granted 14 year leases – a suitable compromise that encouraged investment but still left the door open for land reforms which, from the 1860s, redistributed some of the vast neglected squatter lands to settlers pursuing smaller scale, but more intensive, farming. Besides providing an incentive for erstwhile squatters to invest in improvements, tenure also enabled them to offer their land as loan security, which gradually encouraged banks to become more accommodating. THE RISE OF THE STOCK AND STATION AGENT However, it was the rise of the stock and station agent industry (sometimes known as pastoral finance companies) which provided the financial shot in the arm that the rural sector needed. The rapid expansion of rural production in Australia and exports out of the country, especially wool, from the mid-nineteenth century onwards provided one of the earliest opportunities for business specialisation for the burgeoning colonial economies. As we noted above, the challenges farmers faced included access to financial support and to overseas markets. Many were first-time farmers who also sought business and technical advice. The stock and station agents provided all of these services as a one-stop service for the ‘man on the land’. Many agents were themselves former farmers who were well-connected locally and recognised the need for a rural services specialist to fill this ‘entrepreneurial gap’ between farmers and buyers. These agents would set up shopfronts in their communities, and thus the ‘Rural Entrepreneurs’ came into being [Simon Ville, The Rural Entrepreneurs: A History of the Stock and Station Agent Industry in Australia and New Zealand, Cambridge University Press, 2000]. As settlers spread across the continent in the second half of the nineteenth century, every rural town became home to at least one stock and station agent. Most agents were charismatic figures who connected into rich seams of social capital in small towns and made it their business to know everyone else’s business. In addition to their many other services, agents also organised

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livestock auctions, major occasions in the local social and economic calendar that furthered their influence. Agglomeration through mergers and acquisitions occurred in phases, and by the late nineteenth and early twentieth centuries major national firms – household names such as Dalgety, Elders and Goldsbrough Mort – had begun to dominate the agent industry. By the 1960s there were nearly 1500 agent branches across Australia, a third of which were owned by the five largest companies. The agents both lent to farmers directly and served as intermediaries between them and the general banking sector as these major financial institutions recognised the business opportunities presented by the growing rural sector and found ways to circumvent its regulations. Credit markets rely on accurate information to work effectively, without which loans might never occur and, if they do, could result in foreclosure. Without good information about the borrower and their business, lenders faced problems that economists refer to as ‘adverse selection’ and ‘moral hazard’, wherein the wrong people are lent to or borrowers behave dishonestly. The agents, unlike the bankers, understood the agriculture industry and knew local farmers. Moreover, their knowledge and connections meant they often stood by their farmer clients through severe depressions when general bank lenders would cut their losses and foreclose in large numbers (as happened during the interwar downturn). Collectively agents accounted for around 12 per cent of assets in the financial intermediation sector, a portion surpassed only by that of the major banks. Agents were able to make this strong commitment to farmers by tying their own success closely to that of their farmer clients. In return for agent financing, the farmer agreed to sell or consign their wool through that agent, who earned valuable broker commissions in return. Thus, supporting farmers through thin times wasn’t just good will; it came with the promise of valuable future commissions. Indeed, agents sometimes lent to farmers at zero profit or even at a loss in order to compete effectively against banks, which were mostly unable to provide wool commission services. Of course, not all farmers

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were constrained by debt obligations in choosing how to sell their clip and some were less inclined to see the long-term benefits of mutuality. As one farmer noted, ‘‘I shear the sheep, and my agents shear me” [A. Sinclair, A Clip of Wool from the Shearing Shed to Ship (Sydney, 1913), 2nd ed., p. 13.]. SUBDIVISION, CRISIS AND THE GROWTH OF LOCAL MARKETS Later in the nineteenth century, new challenges emerged for lenders from the subdivision of many large pastoral estates into more diverse, smaller farms. These ventures, such as dairying and frozen meat production, were undertaken by farming families, sometimes jointly, with few resources to fall back on. Moreover, the severe drought and economic downturn of the 1890s stretched many agents as well as farmers. At least one major agent, Goldsbrough Mort, was nearly dragged under by the financial crisis of the early 1890s which gutted much of Australia’s banking industry. Goldsbrough Mort had to be reconstructed in order to survive a crisis which permanently closed the doors of half of the nation’s deposit-taking institutions. From this near death experience emerged the cathartic realisation that agents had been making too many long-term illiquid loans to farmers while relying on relatively short-term and cyclical income flows from commodity sales and deposits at call. As a result, many agents restructured their businesses in a manner that promoted cooperation with the banking sector – leaving the banks, with their greater financial resources, to provide long-term loans while agents focussed on mediating these loans and providing mostly short- and medium-term financial support. This new business model was also consistent with a shift towards brokering wool sales, which at end of the nineteenth century began relocating from London to the Australian capital cities (especially Sydney, Melbourne, Adelaide and Brisbane). Some banks responded to these changes by broadening the range of pastoral services they offered. A number of savings banks established rural departments and several banks dedicated solely to agriculture emerged, particularly in Queensland, Tasmania and Western Australia. The knowledge and

skills required for responsible lending to the rural sector meant that specialist providers continued to dominate through the twentieth century, either as offshoots of major banks or the products of former stock and station agencies. Among today’s leaders, Rabobank derives from Dutch agricultural cooperatives, while Rural Bank, which owns Rural Finance Corporation (a former lender for the Victorian government), is the result of an alliance between Elders and Bendigo and Adelaide Banks. GOVERNMENT LENDS A ‘HELPING HAND’ Governments of all political leanings have recognised the importance of maintaining a productive and prosperous farming sector. Agricultural exports have been a key source of economic growth and a means of paying for manufactured imports. The sector holds important strategic relevance, indicated perhaps in the monopsony over key commodities provided to the British government during both World Wars. A thriving Australian rural sector embodies a cultural icon for Australia by providing national identity and confidence in our place in the global economy. Atop all of this, the rise of the Country Party (the forerunner of the National Party) from the 1920s has provided a powerful political voice to farmers. Much of government’s financial support has been designed to address the cyclical instability of farming. State governments have provided emergency assistance to farmers in hard times. In the prolonged downturn between the two World Wars, state governments intervened by using bridging finance to foster cooperative behaviour among farmers in the hope that this would be cost-reducing. Queensland passed the Primary Producers Cooperative Association Acts 1923-6 and the New South Wales government registered co-operatives under the Cooperative, Community Settlement and Credit Act. The federal government was closely involved with funding the post-WWI soldier settler scheme to put returned servicemen on the land. Inadequate resources and plot sizes destined many of these new farmers to failure, which in turn became the business of government. In 1925, the Rural Credits department of the Commonwealth Bank – an institution increasingly behaving like a central bank – was set up to provide struggling farmers with short-term assistance. Supporting farmers through periods of drought has been a key aspect of government support programs since the 1930s. However, policy has evolved from support designed to provide temporary assistance to more proactive measures, such as assisting farmers in drought-proofing their properties through better access to, and more efficient use of, water. In recent decades, governments have looked more closely at how structural changes in the economy impact farmers. Changes in global markets and technological innovations, in particular, shift the competitive basis of many farming units. Structural adjustment funding has been designed to support farming units that appear to be viable beyond short-term shocks and assist the departure from the industry of others not considered sufficiently competitive to survive. In addition to giving direct support to individual farmers, governments have intervened in volatile markets to reduce farming risks by providing greater income stability. From the early twentieth century onwards, the price of many Australian farm products was set by some form of central intervention, usually a statutory marketing board. Volatile commodity prices impact agriculture heavily due to high fixed production costs, which cannot easily be adjusted downwards in response to falling incomes. The growing class of small farmer in the twentieth century had fewer resources to fall back on than their colonial forebears, and faced unstable cycles of boom, bust and wartime imperatives.

Wool differed from most other farm products, since its heterogeneous nature made it unsuitable for sale through a marketing board. Pastoralists argued among themselves for half a century over whether to introduce a reserve price scheme that would stabilise the price of wool through thick and thin and provide greater certainty for small farmers who, by 1945, greatly outnumbered the older pastoralist elite. At length, a reserve price scheme was introduced in 1970 under which wool that failed to sell at auction above an administratively determined price would be centrally purchased under the supervision of the Australian Wool Commission. The result was the accumulation of a huge and expensive stockpile of wool, which forced the ignominious termination of the scheme in 1991. At the end of that decade, a report into the future of the wool industry was singular in its rejection of reserve price schemes: “Under no circumstances whatsoever should any form of RPS for wool ever be reintroduced into Australia.” The establishment of the Sydney Greasy Wool Futures Exchange in 1960 proved a more successful and enduring vehicle for stabilising farmers’ financial returns, and laid the foundation for the contemporary Sydney Futures Exchange. MODERN MARKETS AND AGRIBUSINESS A growing share of agricultural production in the last few decades has been produced by large agribusinesses. Many of these companies have expanded to meet the growing economies of scale through technically-advanced production. This has led to the point that such large agribusinesses can secure listings on the Australian stock market to benefit from the post-1980s deregulation of the Australian capital market and gain access to a range of financial instruments and institutions. Some of these businesses have expanded by combining vertical integration in the growth and transformation of farm products, or by providing the sector with services such as marketing. By the end of 2015, agribusinesses listed in Australia had a combined capitalisation of $20 billion. Elders, Nufarm and Graincorp are among the largest of these companies. Some very large agribusinesses are foreign multinationals that have brought their funds and expertise to the local sector; these include JBS Australia (Brazilian meat business), Glencore Grain (Swiss commodity logistics) and Wilmar Sugar (Singaporean sugar refiner). The growth of the Asian middle classes is presently seen as a major source of demand for Australian farm output in the coming decades and, more broadly, has motivated discussion about whether a boom in food production will provide the next source of national economic growth after the end of the mining boom. Funding the necessary investment to grow production has reignited the old debate of selling off the farm, as the extent to which future agricultural expansion should be funded by foreign capital is discussed across the country. ABOUT THE AUTHOR: Simon Ville is Professor of Economic and Business History, School of Humanities and Social Inquiry in the Faculty of Law at the University of Wollongong. He has a BA (Hons) in History and a PhD in Economic History from University College London and has previously worked at the Australian National University, Harvard Business School, London School of Economics, and the Universities of Glasgow and Melbourne. He has also won the Bruce McComish Prize in Economic History (awarded to the best publication on the economic history of Australia and New Zealand) for his book The Rural Entrepreneurs: A History of the Stock and Station Agent Industry in Australia and New Zealand.

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02/ESSAYS

Education and agriculture in Australia – a journey of contradiction Education in agriculture has evolved in conjunction with the rest of the Australian education system. In some ways it has a special place in the system, while in other ways agriculture missed the boat by not taking advantage of opportunities available. J IM PRAT LEY and CAMERO N AR C HER discuss this relationship and its strengths and weaknesses.

t the time of first settlement in 1788, there was no education system. Members of the upper and middle classes were the only ones who could afford to pay tuition in those early days, although there were no teaching standards for those who provided the tuition. As Marion McCreadie indicates: “By the 1830s, the idea that crime was the result of ignorance, ignorance was the result of a lack of education and, therefore, education would decrease crime, was seen as a means of forging the penal colony of Australia into an organised and orderly society. Opponents of this idea, however, felt that the child of a blacksmith did not need any more education than what was necessary for him to become a blacksmith, the child of a farmer only what was necessary for him to be a successful farmer.” McCreadie, M. (2006) The evolution of education in Australia, (http:// www.historyaustralia.org.au/ifhaa/schools/evelutio.htm) The lower class then learned through experience and by what was handed down. This practice perpetuated in farming well into the 20th century. Early formal education was largely conducted by the various churches,

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supported by colonial government, and control was vested in these institutions at the local level. Dissatisfaction with education provision by the religions led the states to enact legislation, despite religious opposition, to establish public school systems which were free, compulsory, secular and under the control of government ministers. All states implemented this, albeit at different times, with Kempsey National School becoming the first school to join the government education system in New South Wales in 1848. Many such schools comprised primary, secondary or combinations of both. Secondary schools first began in late 1883 with the establishment of separate high schools for boys and girls in Bathurst, Goulburn and Sydney. From their inception, the high schools offered an academic course designed mainly for students intent on entering university. Entrance to high school was through a competitive examination, so a large proportion of children in those days did not progress beyond Year 6 – in NSW and Victoria around 1910 for example, fewer than 5 per cent of the school population continued schooling after primary level.

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BOXâ&#x20AC;&#x2C6;1:

whose I. Q. is so low as to render it completely doubtful as to whether they will succeed in satisfactorily completing a

DEPARTMENT OF EDUCATION 00160 11 Jan. 1939 AGRICULTURAL HIGH SCHOOL POLICY

matriculation course. Boys whose I. Q. falls below this standard

The establishment of the Farrer Memorial Agricultural High School

School is not to provide a training farm course. Such facilities are

at Tamworth will give to the State the third residential Agricultural

only for the better training of the student in the application of

High School geographically so placed as to provide effective training

science and a better apprehension of its teachings. For those lads of

for students who wish to qualify for a degree either in Veterinary or

lower standard of intelligence, the obvious place is an Agricultural

Agricultural Science. It appears to me that with the establishment of

Farm where courses are designed to meet the requirements of a

this third school the time has arrived for the Department to seriously

training school for lads who wish to become practical farmers.

review the existing policy with a view to determining what is best in

The training there is along the lines of practical work, systematic

the interests of this branch and of the State in the future. Agricultural

routine and a thorough knowledge of the work and implements of

High Schools, by reason of the fact that they provide residential

agriculture. This section of the work in an Agricultural High School

accommodation for students who enrol, plus provision for practical

is largely incidental, though necessary.

should not be admitted to Agricultural High Schools unless there is a surplus of accommodation which cannot be otherwise used. It will be noted that the real purpose of an Agricultural High

husbandry, etc., are in the nature of things fairly costly to establish

To place an Agricultural High School upon the level of a training

and maintain. It is essential, therefore, that the cost so incurred by

farm is to incur an expenditure which cannot be justified in the

the State should be compensated by the maximum advantage in the

final analysis. There is continuous complaint of the overcrowding

way of educational results of the highest possible order.

of our Agricultural High Schools. And it is probable that even with

I am of the opinion that for many years to come the Department

the establishment of the Farrer Memorial High School at Tamworth,

should not commit itself further to the building of such schools,

this overcrowding will continue unless a rigid standard of entrance

but should concentrate on completion of schools which are

is applied along the lines which will ensure, so I have already

now established, ensuring that they shall have the best possible

indicated, that those who commence the course will be capable of

equipment and accommodation for the maximum number of lads

carrying it through successfully.

who can be efficiently accommodated there. Further, I am of the opinion that having regard to the fact these schools are so designed

I desire that this policy be noted for action in the forthcoming and succeeding years.

and equipped as to prepare for a University Degree, it is not in the interests of the State that boys should be admitted to these schools

THE SCHOOL SYSTEM FOR AGRICULTURAL EDUCATION ACROSS THE STATES It was somewhat revolutionary then when in 1907 a new school called the Hurlstone Agricultural Continuation School was created at Ashfield in Sydney to prepare boys for farm production and for admission to Hawkesbury Agricultural College. The course was only for two years and no other school in the state at the time had subjects about agriculture since farming was considered something you learned at home, not in the classroom. Hurlstone Agricultural High School, as it developed, was moved to Glenfield in 1926 due to urban encroachment and is scheduled to move again in 2020 as Glenfield has become a residential area of Sydney. It was a boarding school particularly for country students and its success generated three other schools in NSW which were designated as agricultural high schools. Two are located in rural areas at Yanco (Yanco Agricultural High School) and Tamworth (Farrer Memorial Agricultural High School), and were established to train future farmers and provide education for isolated students. The fourth, James Ruse Agricultural High School, was established much later in 1959 on the outskirts of Sydney to provide training for local students from farm industries. With time, three of the four schools have become selec-

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D.H. DRUMMOND.

tive schools with high academic pursuits â&#x20AC;&#x201C; indeed, James Ruse is the highest selective and highest performing school in Australia. The memorandum from the Minister in 1939 (Box 1) clearly indicates that these schools were to perform at high academic levels. In some other states agricultural education was also given special status. In South Australia the Urrbrae Agricultural High School came into existence in 1932, although the school itself dates back to 1913 as a bequest to teach agriculture to boys. It is the only comprehensive special interest agricultural secondary school in South Australia and it is recognised as a centre of excellence in student learning with a focus on agriculture, technology and the environment. Much later, in the 1940s and 1950s, the government of Western Australia enabled the development of a network of agricultural senior schools. This network, now called the Western Australian College of Agriculture, comprises residential campuses at Cunderdin, Harvey, Denmark and Morawa for Years 10, 11 and 12. They are separated from the junior high schools and located on farms, where instruction takes place with a focus on vocational studies but provision also exists for higher education entrance programs. A selection process for the schools requires students to demonstrate an interest in agriculture or related industries.

Perhaps the most intriguing and informative of attitudes was the foray by the government of Victoria into agricultural high schools. Agriculture was used politically to establish secondary public schools (‘continuation schools’) in rural Victoria due to opposition from independent schools in the city. It was supported by the government’s wish to encourage people onto the land, but this created practitioners without the appropriate knowledge and led to many failures (Martin, R. A. (1977), The Victorian agricultural high schools: origins, development and failure: with special reference to Ballarat, Sale, Shepparton and Wangaratta agricultural high schools, Masters Coursework thesis, Education, The University of Melbourne.). Education into agricultural techniques was seen as essential, and the courses were made up of one-third culture subjects, one-third science subjects related to agriculture and one-third farm work. One deficiency in the agricultural high school system was the difficulty for students to be qualified to enter higher education. In reality they were continuation schools with agriculture in the name, and their establishment in some of the smaller centres of Victoria resulted in the closure of independent schools in those centres. After the failure of the agriculture courses in these schools, it was regulated in 1916 that agriculture should be retained as a subject. For the newly created Intermediate Certificate, all male candidates going to school in rural areas were required to study agriculture as one of their subjects. Martin (1977) reports much community apathy towards the ‘agriculture’ in the schools and little financial support. In the end, the schools had ‘agriculture’ removed from their names and they reverted to continuation schools. More importantly, Martin’s paper was revealing in the attitudes of farmers to agricultural education – they were sceptical about the needs for such a course since they had learnt by experience and progressed without training. Further, a potent factor described was that “farmers as a class are sceptical of men who are classed as experts”. This view is reflective of a significant proportion of farmers and pastoralists through much of the 20th century in Australia.

BOX 2: “The success of some of these farmers is measured in the amount of wealth accumulated… if the farmer could be convinced that… a wider education and a scientific knowledge of the principles underlying agriculture would achieve the same end…. And at the same time secure happiness in work and a fuller life because an intelligent interest in the doings of others and in the welfare of the State would be created, then our agricultural high schools become

across Australia including independent and private schools. The number of secondary schools in NSW now offering agriculture is significant (as shown in Figure 1), and these schools are distributed all across the state. In some of these schools, however, it soon became the de facto subject for disinterested and less able students. This generated a negative attitude amongst students and teaching staff towards agriculture, and so students with ability avoided such subjects even though their interests may have been highly compatible. As fewer people were employed in agriculture on-farm – and as more of the population moved to the cities – a disconnection evolved between agriculture and the majority

350

FIGURE 1

300 250 200 150 100 50 0

1997

YEAR 12

YEAR 11

YEAR 10 2002

2007

2012

of the population, tarnishing the image of agriculture. Number of schools in NSW offering agriculture subjects, 1997-2012 (Pratley, J (2013), Review into Agricultural Education and Training in New South Wales, NSW Government, Sydney ISBN 978-0-646-59653-2) Since 2000, there has been a change in attitude towards agriculture as issues such as global food security have gained traction. The lack of young people going into agriculture became a driver to reinvigorate agricultural education at all levels, particularly at the school level. A Ministerial Review into agricultural education and training in NSW led to the designation of seven ‘Lighthouse Schools’ in agriculture in 2015. These Lighthouse Schools, together with the Agricultural High Schools, have become part of a network of schools with responsibility for providing leadership and support for other schools that were involved to a lesser extent in agriculture. The transfer of Hurlstone Agricultural High School in NSW to the campus of Western Sydney University in 2020 with a focus on STEM (science, technology, engineering and maths) education signifies a further strengthening of emphasis in agricultural education for NSW.

more popular.” Headmaster of Ballarat Agricultural High School 1916 (extract from Martin, 1977)

So it is clear that in those early days the benefits of an education per se were being touted even though the sector tended not to embrace it. THE EXPANSION OF AGRICULTURAL EDUCATION Over time, agriculture became a subject of study at many high schools

CHALLENGES FOR THE SCHOOL SYSTEM Overall, in respect of the school system for agricultural education, there are some strong contradictions. Agriculture is one of the few industry sectors to have specialist high schools in at least three states, despite its unpopularity in the community for the last 30 years of the 1900s. These specialist schools for the most part though are very high performing schools academically, whereas agriculture in many other schools is – or has been – considered an inferior study. It is also clear that through the evolution to current offerings the early provision for ‘boys only’ over a long period has now largely dissipated and agriculture is seen as appropriate for girls as it is for boys.

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The wider issue that influences education is that of consumers having knowledge of their food: where it comes from and how it is produced. Because the practices involved in making agricultural products are now foreign to most people, the danger is that they learn about them from poorly-informed sources. Subsequently, they may reject modern agricultural production methods and set about opposing agriculture. If these views become mainstream it becomes very difficult for agricultural industries to operate and progress. Although it is important for students to be taught best practice in their agricultural subjects, this ‘preaches to the converted’ and does not address the wider issue. Clearly for best outcomes, all students – and their teachers and advisers – need to be exposed to a holistic coverage of food and fibre production and consumption. This can be achieved through agricultural contexts in other subjects. In 2009, the Australian Curriculum, Assessment and Reporting Authority (ACARA) was established to execute a national curriculum in Australian schools. While this change provided an opportunity for populating the curriculum with agriculture, there was also a requirement for the development of agricultural teaching resources and the professional development of teachers and advisers. The establishment of the Primary Industries Education Foundation Australia (PIEFA) in 2007 has allowed this process to occur in conjunction with other providers. There are over 3.5 million school students in Australia, 250,000 teachers and 9,500 schools – so the challenge is a major one. At the same time, there is the need for industries to work towards generating a positive image and identifying career paths that are attractive to the emerging workforce. TERTIARY AGRICULTURAL EDUCATION IN AUSTRALIA The term ‘tertiary education’, a relatively recent descriptor, refers to all education post-secondary school and is largely split between vocational education

BOX 3:

and training (VET) and higher education (largely university). Lindsay Falvey and Barrie Bardsley, in their 1997 publication Land and food: agricultural and related education in the Victorian colleges and the University of Melbourne, discussed the revitalisation of agricultural education in the Australian university system and identified the need for distinct and high quality skills-based and degree courses with pathways between the two. A traditional view is that universities have moved away from their original scholarly function to a business model of qualifications and skills. In agriculture this is the case as the curriculum has little space for reflective considerations and employers put pressure on universities to produce job-ready graduates. Former Australian Chief Scientist Ian Chubb strongly promoted universities as providing ‘employment-ready’ (prepared for the future) rather than ‘job-ready’ (focused on the present) graduates and this tension remains, particularly with agricultural employers. SPECIALIST AGRICULTURAL COLLEGES While Australian universities were established progressively from the 1850s, agricultural colleges predated faculties of agriculture in the universities. South Australia, Victoria, New South Wales and Queensland all had agricultural colleges established by their respective colonial governments in the late 1800s, whereas the teaching of agriculture in universities did not start until the early 1900s. Agricultural colleges are unique educational institutions and date back to the 19th century when they were established in Europe. The first agricultural college in the English-speaking world was Cirencester (1845), now known as the Royal Agricultural College. The establishment of such institutions in Australia were heavily influenced by similar developments in the UK. These agricultural colleges were particularly for the training of farm boys to certificate or diploma level, also providing the opportunity to articulate to university en-

subjects, and whereas the old-time farmer had time to learn by trial and error, the farmer of today is compelled to accept the accelerated

How Western Australia is dealing with the problems of agricultural education by “Martingale”

pace brought about by changing world conditions. FARMERS are naturally averse to change. Their calling is an ancient one with its broad outlines, but little has changed throughout the ages, and past experience has taught them the

“PROBABLY never before in the history of the world has there

dangers of being swayed by untested innovations. Even today

existed a greater need for men of trained intelligence in the ranks

there are practical farmers who regard agricultural education with

of agriculturists. The trend of modern life in a highly-industrialised

scepticism and even hostility, despite the fact that they are taking

world has forced agriculture out of the comparatively leisurely

full advantage of new techniques introduced by the agricultural

tempo at which it has been conducted throughout the centuries,

scientist. I think, however that this type is in the minority in these

for the farmer himself is not content to adopt the primitive mode

days. Most farmers are fully cognisant of the part played by science

of life which contented his ancestors, but wants motor cars, radios,

in agriculture, and many would like to ensure that their sons

electric light and power and all the other amenities enjoyed by his

commence their careers equipped with a sound foundation of

urban acquaintances.

scientific and technical knowledge upon which to base the practical

More and more dependent upon the commercial and

experience of later years. Admittedly comparatively few of them

industrial world for his tools of trade, his tractors, trucks, artificial

really take the necessary steps to make this possible but I feel it is

fertilisers, and complicated implements, he is forced to boost up

due partly to financial stringencies and partly to the fact that there

production and cut down costs. To do this successfully he must

has never been an active campaign to “sell” agricultural education

overcome a host of problems of a financial, biological, chemical

to the farmers of our state. Many West Australians are quite

and mechanical nature. To grow better crops he must use better

unaware of the fact that we possess an agricultural college in this

implements and study the manorial requirements of his land more

state. Others have a vague idea of its existence, but nothing more.”

closely. He must improve his stock by skilled animal husbandry, by paying more and more attention to feeding, breeding and kindred

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Extract from Western Maim. Perth WA, 18 Dec 1941

trance. Their establishment coincided with the closer settlement movement, and graduates of the colleges worked both for the government and on farms. The initial thrust to establish agricultural colleges in each colony was driven more by city interests than country interests. Large landholders or graziers, the descendants of the squatters (by then landed gentry), did not readily support the new colleges. Their interest in education was in sending their sons and daughters to private boarding schools in the capital cities, believing anything that needed to be learnt about agriculture (more specifically grazing) could be learnt on the job. The 1950s saw a succession of good seasons and relatively strong prices for farm commodities. The impacts of post-war research and development and the application of science and technology were becoming very apparent. As a result, the demand for training in these technologies was strong and it was felt that the jackaroo system was not adequate to train young people for a farming career. At this time there was also a rise in the discipline of farm management, principally coming from Massey and Lincoln Agricultural Colleges in New Zealand. The Australian agricultural colleges, which had now been operating for decades, did not readily embrace this emphasis on farm management. Farmers were often critical of the colleges, their farms and courses as they had moved away from farmer training towards extension and other professional careers. As a result, in the 1960s, new agricultural colleges that focused on farmer training were established in Queensland, NSW and Victoria to train young boys for a career on the land. These residential colleges were based on farms and they had strong support from the farm sector. Only three such colleges remain – Longreach and Emerald in Queensland and Tocal in NSW – the others either closing or consolidated with another. Two of these colleges, Marcus Oldham College and Orange Agricultural College, had particular emphasis on farm management. Special mention should be made of Marcus Oldham College in Geelong, which is now the only private agricultural college in Australia. With a focus on farm management, the college was fully residential and required students to spend time in the industry gaining first-hand experience. It remains successful in that paradigm, although its academic standards now categorise it within higher education. Orange Agricultural College has been absorbed into Charles Sturt University, with agricultural education moved to the Wagga Wagga campus. In the 1960s most colleges were under the auspices of state departments of agriculture. Education was largely the responsibility of the state, but increasingly the federal government was providing funding to tertiary institutions. In 1971 most of the original colleges became Colleges of Advanced Education (CAEs) in a two-tier system of higher education and gradually moved to offering degrees over the succeeding years. The Dawkins Report in the late 1980s then removed the two-tier system, putting in place a unified model of universities as most colleges moved into existing universities or became new universities. In almost all cases, the early versions of the institutions described their mission as educating boys, lads or young men in the ‘practice and science of agriculture’ for profitable management of farms (Falvey and Bardsley, 1997). Clearly there was no consideration given in the early days to the possibility that young women might have aspirations on farm or in industry. This was also the case in agricultural high schools, agricultural colleges and universities. There seems to have been an epiphany in the 1970s as many of the institutions progressively, but suddenly, became coeducational. At that time there was a strong affirmative action push and, during the 1960s, legislation against discrimination of sex, race and religion was adopted by various states. It also coincided with the social reforms of the Whitlam gov-

ernment, although whether that played a role is a matter for debate. Universities were generally more liberal at an earlier time, and Burnley Horticultural College was well ahead of sister colleges in admitting women part-time from 1899 and full-time from 1914. Falvey and Bardsley (1997) recount that many female students treated Burnley as a form of finishing school as it did not lead to a means of livelihood. In the 21st century women now outnumber men in higher education agriculture (Figure 2). VOCATIONAL EDUCATION AND TRAINING General education establishments were in place from the early 1800s for post school learning, beginning in Hobart in 1827 and in most major centres by 1840 (Goozee, G. (2001), The development of TAFE in Australia, National Centre for Vocational Education Research Ltd, Leabrook South Australia). These initially included Schools of Arts, Mechanics Institutes and Technical Colleges. After Federation in 1901, these continued to be solely funded by the state governments until the 1970s. Often they were stand alone and regionally independent colleges that had strong industry and community support. Agricultural colleges evolved during the same time but were never directly associated with the technical college system. In the early 1970s the federal government established the Australian Technical and Further Education Commission to develop consistency in technical education across the nation. The desire for consistency continues to this day. The Kangan Report in 1974 defined what was to become the TAFE system with the acronym being adopted as the brand for the various forms of technical education in each state. Most technical colleges had dated facilities and many were over-crowded and under-resourced. Successive federal governments poured money into the newly created TAFE system, including the more recent agricultural colleges, and this continued for both capital and recurrent funds until the early 2000s. The TAFE system was, by implication, a monopoly for tertiary, non-university, education. The only anomalies were the few agricultural colleges. During the late 1970s through to the 1990s, TAFE was lavishly funded and developed extensive facilities and resources across the country to provide its mostly-free courses. Throughout its state networks it provided a wide range of agricultural and related courses at certificate and diploma levels, and played a strong part in skills development in agriculture. Some TAFE campuses such as at Wagga Wagga and Dubbo in NSW became specialist primary industries campuses. AGRICULTURAL EDUCATION IN OTHER UNIVERSITIES Education in the discipline of agricultural science at university level commenced at the University of Melbourne in 1905 and the University of Sydney in 1911, with other universities following over the next 80 years or so. All Australian universities were located in metropolitan areas until the University of New England was established in the 1950s. Despite this lack of opportunities, agricultural education was available to regional students through the rural-based colleges. The number of ‘agricultural’ universities grew to 9 by the 1980s. Together with the CAEs in agriculture there were about 22 campuses offering higher education agriculture at the time of Dawkins reform in 1989. The McColl Report of 1991 (McColl, J Robson, AD, and Chudleigh, JW (1991) Report of the Review of Agricultural and Related Education, Department of Employment, Education and Training, Canberra) indicated inter alia that multi-disciplinary institutions were educationally more desirable than specialist agricultural institutions, and that there should be fewer campuses, with existing ones made stronger. Further, the Report indicated that there was a shortage of agricultural graduates and this should be addressed.

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Table 1. Composition of participants in agricultural and related education in 1990 (McColl et al., 1991) Category Percentage Women 34 Indigenous 0.2 Rural 55 Interstate 11 External study 16 International 6

BOX 4:

From that time, however, intakes to higher education started to decline and continued downwards through to 2012. In the process the number of campuses halved to about 11, fulfilling the recommendation of the Report, except that reduced numbers of students at almost all campuses had weakened the schools of agriculture. The composition of the agricultural student body at the time of the McColl Report is given in Table 1. Males dominated, indigenous students were very poorly represented and international student numbers were low. The only change has been the attainment of gender balance in recent times. The decline in university enrolments in agriculture since 2001 is shown in Figure 2. This also shows the relative decline in funding to these faculties as universities are funded on a per student basis. The decline shown represents the loss equivalence of about 100 academic staff across the nation. What is also important to note is the changeover in student gender during this time, in stark contrast to earlier times of males only.

Future of Australian Education “In rural production we are passing, if we have not already passed, out of the era in which only certain staple lines of production needed to be engaged in, for which there was a reasonable assurance of a world market. The period has been described by some experts as the period of exploitation. We are passing out of that. We are entering the period when there will be much more difficulty in obtaining markets. I am now taking the long view. We are passing into the period when we must direct ourselves to much more intensive use of our soil, with much more scientific knowledge of its treatment and possibilities and with much greater variety of production. If our rural industries are not to enjoy a brief period of high prosperity, while the world is going through the reconstruction period, followed by a shrinkage in the period of fierce competition that will then probably ensue, it seems clear that we must increase our efficiency and get our costs down. That will involve, I believe, at least two things. It will involve a large development of scientific research in its relation to the agricultural and pastoral industries. It will involve serious attention to the problem of, not theoretical training, but scientific training for the actual work of the farmer. In regard to scientific training for the man on the land, it has seemed to me for a long time an anomaly that in a country so largely dependent for its true prosperity upon production from the soil, such meagre facilities should exist in relation to agricultural colleges, and that most of the existing colleges –and I have had a close look at a few – should be so obviously starved of plant, equipment, staff and buildings. If our attitude is to be that rural production is a mere matter of practical experience sharply limited to the locality in which it is acquired, and that a sound preliminary mental training is not needed, we shall fall very rapidly behind the other competitor countries. On these matters, I should like to mention without discussing it further the position of agricultural and other technical experts in this country, often underpaid and overworked, who are the advisers of the man on the land. They have given and are giving notable service.” R.G. Menzies. 1945

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FIGURE 2 5000 4000 3000 2000 1000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 MALE

FEMALE

TOTAL

Annual enrolments of students in agriculture and their gender composition in Australian universities, 2001-2014 THE SHORTAGE OF AGRICULTURAL GRADUATES A consistent theme through many reports over time has been the commentary on the shortage of graduates in professional agriculture. It was inferred by Menzies in 1945 (Box 4), made explicit in the Murray report of 1957 and the McColl Report of 1991. It has also been the focus of activity by the Australian Council of Deans of Agriculture in the last decade. It raises the question as to why students have not followed the employment opportunities. A further theme has been the opposition by farmers to formal tertiary education. This is particularly so with respect to university education. Falvey and Bardsley (1997) record that “the image of agriculture has not been assisted by the relative neglect of farmer education. This has allowed criticism of the knowledge levels of persons charged with managing the bulk of the country’s terrestrial resources”. In the 1960s, less than two per cent of the 6,000 to 8,000 persons entering farming in Australia each year had formal post-secondary education. The data for the past three decades or so provide stark evidence of the discrepancy between those in farm production and the remainder of the Australian workforce (Figure 3). It is pleasing to note that between 1984 and 2012 there has been substantial improvement in the proportion holding a degree from around 2 per cent to nearly 12 per cent. This improvement can be expected to continue as generational change takes effect, since agriculture’s age distribution is weighted towards the higher age brackets which have low levels

of tertiary education. The increasing influence of corporate farming may also be contributing. The challenging statistics however are the increasing gaps between agriculture and the rest of the population, although the relativities have narrowed (the population was 4.5 times more likely than agriculturalists to have a degree in 1984 and about 2.3 times in 2012).

FIGURE 3 30 25 20 15 10 5 0 1984

1994

2004 AGRICULTURE

2009

2012

COMMUNITY

Trends in degree attainment in agriculture relative to the Australian workforce (Australian Bureau of Statistics Catalogue No. 6227.0 and previous iterations) Another way of considering this quandary is to look at the data for lack of post-school (largely tertiary education) qualifications (Figure 4). In 1984 more than 70 per cent of agriculturalists had no qualifications following school, relative to just over 50 per cent of the national workforce. These percentages decline to around 52 per cent for agriculturalists and 34 per cent for the Australian workforce in 2012, again a significant improvement but the gap remains. FIGURE 4

80 70 60 50 40 30 20 10

able to do this because there was a higher proportion of the population in the rural areas – albeit in decline – which provided them with a strong political powerbase. In 1973 with the Whitlam government elected federally, much of this protection was removed. The Australian Conservation Council came into being in the 1960s and the Greens in the 1970s. Soil erosion became a political issue as well as an environmental one, and provided a basis for raising the profile of these activist organisations at the expense of agriculture. The suddenness of the changes caught the sector unprepared and it adopted a defensive position from which it took decades to recover. The anti-education stance meant that little advantage was taken of free education introduced by the Whitlam Government, and so the sector became uneducated relative to the rest of the community. The lack of strong industry leadership allowed the sector’s image to be tarnished and the disconnection between city and country has exacerbated this. Whereas in decades past the support of government could mask the need for education outside of ‘on the job’ training, there are several factors that point to the need for a well-educated and trained workforce. These include the development of technology, the need for compliance, the environmental imperative, the biosecurity imperative, the importance of strong business acumen and the need for a positive sector image. There has been significant change in the past decade in particular as these issues are addressed. The industry has now moved from the early 20th century education paradigm to the 21st century paradigm based on qualifications. SUMMING UP Education evolution in Australia has been rapid and we are fortunate that education is readily available and of a high standard that is recognised globally. Agricultural education has featured strongly in the Australian education system, with greater emphasis than for any other industry sector (both in the school system and in post-school offering). In the specialist schools, academic excellence generally (and in agriculture specifically) has been a key principle, but in many other schools agricultural education has suffered until recently from intellectual disdain. The availability of tertiary education has been strong since early days and has served the service industries well. However, farmer education had been shunned by farmers themselves until recent times. Gender balance has now become embedded after many decades of no or low opportunity for women. The challenges faced have created a new imperative for education, and the emerging generation is taking advantage of the vast opportunities that exist through better capability in new technologies and business principles.

0 1984

1994

2004 AGRICULTURE

2009

2012

COMMUNITY

Trends in no post-school qualifications relative to the Australian workforce (Australian Bureau of Statistics Catalogue 6227.0 and previous iterations) The paradigm that farming can be learnt on the job has been a powerful one and remnants are seen today. Why it continued this long is a matter for debate, but there were other contributing factors. Prior to the 1970s agriculture had a powerful voice in parliaments. The Country Party, the forerunner to the National Party, had strong leadership which protected farmers. They were

ABOUT THE AUTHORS: Jim Pratley is Research Professor of Agriculture at Charles Sturt University and Secretary of the Australian Council of Deans of Agriculture. He graduated with BSc and PhD degrees from the University of NSW and took up an academic position at Wagga Wagga, where he has been since 1972. He is a member of the Research Advisory Committee of the Australian Farm Institute, the NSW Primary Industries Ministerial Advisory Council and the National Council for Agriculture, Fisheries and Food of the Australian Academy of Science. Cameron Archer has degrees in agriculture, education and a PhD in Environmental Science. He is Chair of the Primary Industries Education Foundation Australia (PIEFA), Belgenny Farm Trust and former Principal of Tocal College in NSW. He is a leading agricultural educator in Australia and in 2014 was awarded a medal in the Order of Australia (AM) for his services to agricultural education.

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02/ESSAYS

The Bush will not lie down Most Australians live in the cities and cling to the coastal fringe, yet our sense of what an Australian is â&#x20AC;&#x201C; or should be â&#x20AC;&#x201C; is drawn from the vast and varied inland called the bush. D ON W A T S O N explores its ethos and its origins.

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n 1967 I joined a couple of hundred other rural eighteen-year-olds at a new university in the northern suburbs of Melbourne. Thousands more streamed into other universities, teachers’ colleges and city jobs. It was the same every year. A large percentage of these people would make the city their permanent home. Only about 15 per cent of Australians now live outside the cities and the essentially suburban coastal corridor. The country has taken on the character of a gum tree, a critic wrote a few years ago: the heartwood dead and crumbling, all the life in the sapwood of self-obsessing suburbia. And the liveliest of those suburbs are home not to the descendants of drovers and Anzacs, but to ambitious migrants from Asia and the Middle East, with no taste for rural life, and no appetite for sagas of male bonding in shearing sheds and creek beds under Banjo Paterson’s everlasting stars. Nineteenth-century Europeans brought with them their fashionable gothic taste, which the bush with its various ‘contrarieties’ did much to satisfy. It was ‘fantastic’, full of ‘monstrosities’, where “alone is to be found the Grotesque, the Weird, the strange scribblings of nature learning how to write”, as Marcus Clarke said. And since him, a host of writers, painters and film-makers have pursued those themes of a harsh, eerie and dangerous perversity in the landscape, and similar qualities in the people. Yet it remains a commonplace of the official Australian worldview that all that is distinct and admirable in the national character and belief comes from the bush. It made Australians what they are. More than a century ago, Miles Franklin called herself “a child of the mighty bush.” “I’m the mother-bush that bore you,” wrote Henry Lawson. In one of his best stories, The Bush Undertaker. The bush gives rise to Australians only: “the grand Australian bush, nurse and tutor of eccentric minds, the home of the weird, and of much that is different from things in other lands.” And here is a governor of Queensland speaking after the great floods of 2010-11: “So much of what is best, truest and fairest in the Australian character is drawn from our bush traditions, our values forged like gold from the diggings in the challenges – and from the pressures and the opportunities – of life in the bush.” THE BUSH AND THE NATIONAL CHARACTER Asked the origins of their character, Americans might give half a dozen or more answers - the Puritan forefathers, the constitution and its enlightened authors, the Civil War, the unrestrained marketplace, immigration, liberty, the absence of an established Church, the frontier. Different parts of the country are likely to give different answers. But Australians have really only ever had one answer: the bush is where it came from. British institutions and, recently, the Judeo-Christian tradition have been offered, but other people also spring from those places. The official view remains Lawsonian: the bush is a mirror of our imagined natural and unvarnished selves, an emblem of our natures – our natures being hardy and adaptable like gum trees and mulga, dried out like the sclerophylls, and quite unlike the natures of people from continents that lack this kind of vegetation. That the great majority of Australians live in cities does not diminish the power of the bush, but on the contrary adds an exotic or romantic dimension to the suburban cliché of our existence. The bush is where the real Australians live, and whatever hurts or threatens them the rest of the country feels. Our literature, our language, our politics and our prejudices all have deep roots in the countryside, or at least exist in a state of constant interaction with it. The economic historian John Edwards has plausibly suggested that the pattern of drought, flood and financial disaster which characterised the old

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pastoral economy continues to infect contemporary economic thinking with Hanrahan-like gloom. Much in the way of national development – rail and road, dams and irrigation, regional development – has its roots in the land and has shaped our collective identity and ambition. In tethering the world to the mighty bush, as Lawson put it, we tethered ourselves to it. Banjo Paterson’s indelible love song of the Australian male, Clancy of the Overflow, made the case for life on the sunlit plains. Chained to a desk in his dingy office, loathing the foetid air and the ‘pallid’, ‘greedy’, ‘weedy’ masses moping in Sydney’s streets, his narrator’s tune, dreamed of the world west of the Great Divide, and his mate Clancy out there on the sunlit plains, droving in the breezes. Although the bush incited more gloom than joy in him, Henry Lawson also found his literary inspiration there. For The Bulletin (the so-called Bushman’s Bible) of the 1890s and successive schools of writers and artists, the essential Australia was to be found under a gum tree, on the frontiers, farms and sta-

conquered the Never Never and lain it at the feet of the great cities”. That is the nub of the contract: bush people are the valiant few who wrest the continent ‘from the very heart of nature’ for the less valiant many. And this is the debt the people of the cities carry in perpetuity: the bush folk tamed the country, made it knowable, extracted not only food and wealth from it, but a national romance, an identity. The elements might break their hearts but never their wills, to paraphrase the Queensland Premier during the 2011 floods. Mrs Gunn might have written the line. It is axiomatic that the bush made Queenslanders what they are, and if their enthusiasm for raising funds to help their bush brethren can be used as a measure, the cities continue to be grateful.

tions, along the droving routes, wherever people were scarce and sheep or cattle plentiful. Charles Bean reckoned he saw a difference out west in New South Wales before the First World War: the sort who “props up the veranda-posts in country towns” was pretty well the “antithesis of the strong, simple men who live on the stations outside.” No one has ever put it with quite the airy conviction of Mrs Aeneas Gunn. The bush folk in her classic We of the Never Never have in them all that is good about humankind and much besides. Rough-hewn though they are, they will “risk their lives for a woman ... but leave her to pick up her own handkerchief.” They are democratic by nature because “out-bush rank counts for very little.” They are Christian, if not by observance, then by philosophy and spirit. “Bush-folk ... do what they can to help each other”; “have a sixth sense, and know a pal when they see one”; “have long memories and love to rest now and then beside the milestones of the past”. Mrs Gunn was in no doubt that the day had nearly come in the Northern Territory when “the bush folk will have

THE MYTH OF THE BUSH For Australians remote from it, the bush holds some of the same Homeric power as its near relation, Anzac. Anzac is part fact, part fable: the story’s meaning depends not only on what happened and with what motives and reasons, but on what it has suited Australians to make of it. With Anzac the sacrifice and comradeship of the Australian Imperial Forces have been made over into an ideal Australian. The bush speaks of similar admirable qualities. Much as Christians do with the resurrection, Australians relive the Anzac story once a year. The bush serves as the Church, keeping it alive in the off-season, while every drought, flood and fire makes a moral drama to renew and authenticate the foundations of faith. The two legends have been intertwined ever since the first reports came in from Gallipoli: indeed, one of the authors of those early reports and of the official history of Australians in the First World War also wrote one of the classic tracts of the bush legend. Charles Bean’s 1910 On the Wool Track, which he wrote after touring the sheep stations of western New South Wales, is remembered less for its analysis of the wool game than for its characterisation of the people wool threw up. While empire- and nation-builders looked with despair at the signs of moral, racial and physical degeneracy they reckoned they saw in the cities, out on the plains way west of the Divide, where squatters – or their managers – had been breeding ever better kinds of sheep, Bean found a man as if bred from a cross between Ivor Novello and a red kangaroo: a “tall, spare man, clean and wiry ... of a certain refined ascetic strength”. A man who took “everything on its merits, and nothing on authority”. The bush had “hammered out” this man with “frankness ... written largely across his face”. He was out there, “over that faint blue line of the dividing range”. A hundred years later, politicians wishing to identify themselves with the ‘real’ people of the ‘real’ Australia were leaving their city offices and crossing the Divide to be seen with the descendants of this mythical progenitor. The sighting would have been easier to dismiss if Bean had been the only one to see it, but he was far from the first or the last. C.H.S. Matthews, a parson, reckoned such degeneracy as existed in Australia was confined to the mammon-worshipping cities and not to “these dear children of the bush, so strong, so brave, so humorous and true”. Having spent five years in Australia in the 1880s, the young English journalist Francis Adams found nothing that was different – or much less than contemptible – among the city middle classes. But beyond the Divide, where “the marine rainfall flags out”, he saw the beginnings of a “new race”, the “noblest, kindliest and best” Australians. The difference between men of the Divide and the men of the interior, he said, was already “absolutely defined” and “complete”. The bushman was the heart of Australia, “the Australian Australia”. In the same vicinity, Edward S. Sorenson found a man with a “broad hairy

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chest ... huge, muscular arms ... matchless physique ... A man of surging robustness, rugged as his native hills [and] one of nature’s gentlemen.” The bush of Mrs Gunn’s Never Never created her indomitable and adorable bush folk, “turning back the weaklings and worthless to the fleshpots of Egypt, and proving the worth and mettle of the brave-hearted”. It made practical people: “I’ve learned a deal of things in my time,” her Quiet Stockman chuckled, “but reading never taught me none of them.” And he was pretty much as one with Marcus Clarke’s overlanders who, though gentlemen, “alone with their flocks and herds in the vast wilderness”, threw off their city-born conventionality and “felt the joy of an almost savage independence”. “Traversing the great grey forests, or camped by the edge of some friendly waterhole ... [they] felt that wonderful and subtle happiness which is born of solitude and silence”. And all-male company, perhaps. Clarke shared Walt Whitman’s excitement about these “bearded and embrowned” Godlike new men of the New World. He imagined his ideal man reining in a horse on a mountain spur, seeing beneath him “the wide waste of untrodden bush”, and waking “suddenly to the consciousness that he was lord of that wilderness, that in it he could live unmolested and secure, that he could find there a home and a subsistence, with no aid but that of his own hands and his own brains, then for the first time did he discover to what a heritage of power his birthright as a man entitled him”. That was the thing: what men found when they found themselves in the “phantasmagoria of their wild dreamland called the bush” was “their manliness”. It agitated the male imagination, satisfied the male ego. It brought forth the ‘whole man’, E.J. Brady said. A good part of the heroism of pioneer farmers resided in their willingness to endure drudgery and ignore the interior voice telling them that life should be more than this. They must listen instead to the one telling them that things could be worse. A pioneer should have hope, but not so much as to make a fool of himself with God or the neighbours. For the male of the pioneer species, even as it grinds him down, the toilsome life builds him up and goes some way to satisfying the chronic demands of manliness. In the absence of such urgent calls on their identity, women were free to lend a hand to the ‘manly’ work while doing the women’s entirely on their own, and giving birth to the children and caring for them. THE WOMEN OF THE BUSH Forty years ago, in a famous book, Anne Summers wrote that the women of colonial Australia were cast into one of two ancient repressive archetypes whores or obedient representatives of a feminine ideal. Like the Indigenous people, they came wild or tamed. For the first fifty years, the majority went under ‘whores’. Thereafter, what Summers called the existential straitjacket was enlarged to include the option of being “dutiful wives and bountiful mothers”. In both cases women were commodities: prostitutes to be bartered among the men who far outnumbered them, or wives to keep the men in line and to breed up a free, white and decent population. The reprobates were there from the start among the convict population; the dutiful were free immigrants recruited to correct the habits of the frontier and create a more respectable society, but one no less dominated by men. Families and Christian observance would be the foundations. In the country of my youth they still were, even as the eternal Jezebels circled. The bush was an innocent virgin, a fickle temptress, an ‘irrational’ creature beyond the understanding of men. It was the womb and mother and a barren hag. Historians, including Manning Clark, would sometimes say that

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Europeans had treated the land like a whore, raping and despoiling it in their lust and greed. Miners, we are told, draw a distinction between those who prefer ‘virgin’ fields and those who find more reward in reworking places previously explored or mined. Whichever metaphor we choose, in male hands the women of the bush are left without much to say or do for themselves. They cope, endure, suffer, care for the children, turn bronze and gaunt in the sun; represent something more often than they do something. So that they might move about the bush with ordinary male privilege, in two famous novels, Furphy’s Such is Life and Eve Langley’s The Pea-Pickers, women go disguised as men. With so much symbolic baggage, a woman’s experience of the bush had little chance of being the defining kind for the new nation. Rosa Praed, Barbara Baynton and Jessie Couvreur (who wrote as ‘Tasma’), to name just three eminent examples, were effectively elbowed aside by the men who ruled at The Bulletin in the identity-defining I890s. Anticipating the same fate, Ethel Richardson used Henry as her pen-name. The Bushman’s Bible described “how half the world lives”, Barbara Jefferis said, and it would seem to follow that it also defined half the identity. The dominant men of the Heidelberg School preferred the bush with bushmen in it: working men, adventurous men, carving a nation out of the trees and the rocks. When they did appear, women looked hopelessly ill-adapted in crinolines and (in Frederick McCubbin’s works, for example) they did little but add to the weight of sentimentality. Sidney Long got them up and about, but only to romp naked in the scrub and waterholes with native birds and satyrs. The great painting of bush womanhood bears the same title as Lawson’s short story. Like the bush in which Lawson set his embattled woman, Russell Drysdale’s landscape in The Drovers Wife has been blasted bare by drought, rabbits and dieback. Or it might be Passchendaele after the mud has dried. But where Lawson’s heroine is gaunt and hugs her child to breasts as ‘worn out’ as the surrounding bush, Drysdale’s is a bosomy, soft-eyed monolith, the race mother personified, out of her element but commanding it nonetheless. Her husband or mate is a feckless figure watering the wagon’s horses in the background, not away droving but absent nonetheless. In a plain and sensible frock and hat, she could be the last hope for regeneration and common sense. She could even be the continent itself, as it was once. She might be sticking to her mate, enduring the awful folly into which he has dragged her, or waiting for a bus to take her back to the city and away from the fool once and for all. Henry Lawson had been out west to Bourke in the middle of a drought and came back talking about the “horrors of the country”, how “men tramp and beg and live like dogs”. The memories of that experience never left him, and because they informed his greatest and popular work, they also imprinted the nation’s consciousness. The stories based on those horrors and collected in While the Billy Boils (1896) are founding documents of Australian identity and faith. The character was a sort of homespun ironic humanist philosopher. There was a lot of talk about socialism at the time, a lot of tracts circulating. Lawson’s kept it simple: “Socialism is just being mates,” he said. And a mate, he also said, “can do no wrong”. “No man likes to lose a good mate, for mateship is more than a mere term in Australia,” wrote Brady, Lawson’s mate. Many others, including modern politicians, have said the same, even though it leaves us wondering if they believe that men in other countries either don’t have mates or don’t mind losing them.

The territory was already well trodden when Bean got to it, but he had a couple of original things to say. Mates were not just the blokes you sheared sheep with, but blokes you could go into battle with. Bean predicted that should she need to call on Australians in war, England would find them sticking to the empire as they would “to an old mate”. Empire, too, was just being mates. Who knows how many men joined up because their mates did, died because their mates did. Then again, another interpretation might have it that they would stick to the empire because, for all their wattle and bottle patriotism, they had never come unstuck. They were British subjects, after all, and the army they joined was an imperial one. Not for nothing was it called the Australian Imperial Force. In I914 Britain’s hold on Australian minds had never been tighter. It was

particularly tight on the large numbers of bushmen who had the bush – that ‘mysterious country’ would be to the Australian imagination what the sea had been to the English. With their mettle forged in the bush, Bean was sure the bushmen would fight like the “Sea rovers of Queen Elizabeth’s time”. In the rush to enlist at country recruiting stations, and in the deeds of the AIF on the battlefields, he was vindicated. Extracted with permission from The Bush (Hamish Hamilton, 2014). ABOUT THE AUTHOR: Don Watson is one of Australia’s leading writers of non-fiction, and author of bestsellers Recollections of a Bleeding Heart, Death Sentences and Watson’s Dictionary of Weasel Words. The Bush won NSW Premier’s Literary Award for Book of the Year, 2015.

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02/ESSAYS

The vision splendid Australia seemed like a paradise to many early settlers, but farming the harsh environment has been a constant struggle. It takes a special sort of person to be a farmer in Australia. GRA EM E PHIL IPSON looks at how their hopes and dreams â&#x20AC;&#x201C; and hard work â&#x20AC;&#x201C; have helped shape a nation.

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arming is central to the Australian ethos. Though Australia is no longer an agricultural economy, the spirit of the land and of those who work it is ingrained into our image of ourselves. Australia’s greatest poet, Banjo Paterson, evoked in the great Australian countryside ‘the vision splendid’, comparing it to the ‘foetid air and gritty of the dusty dirty city’. Australia may today be one of the most urbanised countries on Earth, but it is Australia’s farmers, graziers and rural communities that embody the Australian spirit and way of life. This view is not so far removed from reality. Many of today’s city dwellers do not realise the extent to which the modern country they live in has been shaped by agriculture and those practicing it. The search for farmland drove the early explorers to cross rugged mountains and endless plains, and the need for a more efficient food chain was the driving force behind many important Australian inventions. In the 19th century, Australia’s financial and transport systems grew to service the country’s booming agricultural industries. The Gold Rush helped, but it was agriculture that really opened up the land. Australia grew wealthy from the produce of its farms, from the golden fleece and the bountiful fields of grain. Also enriched was the Australian character, known the world over as laconic, resilient and resourceful. The Australian farmer is the embodiment of this national persona, of the way the world views Australia and the way Australia sees itself. When you travel the backroads and byways of rural Australia you see the way the land has been shaped, how the countryside – sometimes harsh, sometimes lush, always beautiful – has been adapted to serve man’s needs. Sometimes we went too far and the land took back what was hers, but after hundreds of years we have found equilibrium with nature. Australia’s farmers are custodians of one of Earth’s most ancient landscapes, and have built upon it an agricultural industry of unrivalled efficiency and great variety. THE GREAT PARADOX The Australian character comes from the soil, but one of the great paradoxes of modern Australian life is that those who work that soil are so misunderstood. Or, more often, that they are entirely unknown. Many Australians have very little appreciation of what it is to be a farmer, or of the lives farmers lead. The urban dweller at once identifies with, and yet is often alien from, those who live in the vast expanse of rural Australia. This disconnect is at the heart of modern Australian life. Australia’s great cities are home to many millions of people who have never set foot on a farm and who rarely leave the confines of their urban environment. Perhaps for this very reason, city dwellers very often have a view of rural life far removed from what it is really like. The countryside and those who live in it are idealised, but the image is very different from the reality. This means that Australia’s farming community is probably more misunderstood than those in many other countries that do not have such a romanticised image of rural life. In most nations, city and country are not as far removed from one another as they are in Australia. In most of the developing world they are very close – in China, for example, farmers are regarded as the most important of the three classes of civil society (the others being artisans and merchants). It may be the case that farming is idealised in many Western societies – images of the bucolic French countryside or the stolid English yeoman farmer are stereotypes – but it is in Australia that we see the extremes of this dichotomy. And Australia’s evolution into one of the world’s most multicultural societies has not been reflected in the farming community, which notably still lacks diversity. There are exceptions, such as the strong Italian communities in the

Riverina and on Queensland’s Atherton Tablelands and the Chinese market gardeners near Sydney and Melbourne, but farming in Australia is essentially an Anglo-Celtic pursuit. This has remained the case as agriculture’s share of the economy declines and the farming population falls. Few newcomers are entering the field, which has also seen the average age of Australian farmers rise. Family farms are still the norm, but it is becoming more and more difficult for farmers to persuade their sons and daughters to follow in their footsteps. The number of family farms is declining and holdings are being consolidated as agribusiness is taking over. But it’s a slow process – even the smallest farms are run very professionally, negating economies of scale. Australian farmers are among the most efficient and resourceful in the world – they need to be, given the vagaries of the climate, the fragility of much of the soil and the lack of government protection that exists as the norm in many other countries. Australian farmers are self-reliant, and they have been from the start. THE FIRST AUSTRALIAN FARMERS Agriculture has been an integral part of Australian history since European settlement. The first farmers arrived on the First Fleet, along with the nation’s first farm animals and over a thousand mouths to feed. The new colony was expected to become self-sufficient in food as quickly as possible. When Captain Arthur Phillip sailed into Port Jackson on 26 January 1788, his first and most important job was to find a place to build a settlement. And the key determinant of that location was a steady supply of fresh water. Australian agriculture was born on the same day as modern Australia. The first settlers built their small town on an inlet Phillip named Sydney Cove, after Lord Sydney, Secretary of State for the Colonies. He chose it because of a small rivulet, the Tank Stream, which flowed into it. The infant colony’s first farm was established on the shores of the next bay, which was named Farm Cove. It is still called that today, and on its shores stand Sydney’s Botanical Gardens. Three months after the arrival of the First Fleet, a census counted the total numbers of livestock in the colony: seven horses, six cows, 29 sheep, 74 pigs, five rabbits, 18 turkeys, 29 geese, 35 ducks and 209 other fowl. It was not an auspicious start. Early attempts at agriculture were not successful. The soil on which the young colony was built was sandy, and crops had trouble growing. The first winter was tough, and soon after the colonists looked further afield for good farmland. They found suitable soil near Parramatta, 25 kilometres from Sydney but easily accessible by boat. The land there was rich and fertile. The first farmer of the new lands was a convicted burglar, James Ruse, who prospered as the colony grew. He was successfully growing crops of corn and wheat a year after the colony was founded. An important figure in the development of Australian agriculture was John Macarthur, an argumentative ex-soldier who established Australia’s sheep industry in the early 19th century. Macarthur saw Australia’s great potential, as did the many who followed him. After a slow start the colony grew quickly, especially after the opening up of the vast interior of the continent. Sheep and cattle grazing become important industries as ex-convicts and freemen took up new lands in the fertile inland across the rugged coastal mountains. Many of them did not wait to be granted land – they simply ‘squatted’ on it. For many years these farmers were called squatters, a word that survives today. Others followed. Towns popped up to service the growing agricultural industry. Bullock drays and paddle steamers carried the produce to market

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until, in the late 19th century, the railways began to follow the spread of farmland. In the Queensland tropics, across the wheat belts of southern Australia, in fertile coastal fields and the dry sheep and cattle country of the inland, modern Australia came into being. THE LAND AND ITS PEOPLE There was a time in the history of most countries when agriculture employed the majority of the workforce. Since the Industrial Revolution and the growth of urbanisation that number has fallen, but the importance of agriculture to the economy persisted longer in Australia than in most other places. As a result, the farm sector has had a disproportionate effect of Australian society. Consider how much the following advances owe their existence to agriculture: BANKING AND FINANCE: Australia’s first financial institution, the Bank of New South Wales, was formed in Sydney in 1817 as a response to the colony’s first depression and to help finance its growing agricultural industry. For many years Australian agriculture was dependent on foreign (mainly British) investment, a relationship that necessitated the development of a sophisticated financial system surrounding the agricultural sector. POLITICS: Democracy came early to Australia, with legislative assemblies formed in all colonies well before federation in 1901. Farmers’ interests were well-represented in all legislatures, and were institutionalised at the federal level with the formation of the Country Party in 1920. Now called the National Party, it has been a dominant force in Australian politics for nearly a century, usually in coalition with the centre-right Liberal Party. Today the National Party remains a strong force, and is a vocal representative of the rural sector. TRANSPORTATION: Historian Geoffrey Blainey coined the term ‘the tyranny of

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distance’ to describe not just Australia’s distance from Europe and the rest of the world, but the vast size of the land itself and the difficulty of traversing it. As agriculture spread across the Australian countryside, so too did transportation. Primitive bullock carts and muddy tracks gave way to roads and railways, which followed stock routes and the paths opened up by early farmers and graziers. SCIENCE AND TECHNOLOGY: Australians are an inventive bunch. Many of the technical innovations Australia has introduced to the world owe their origins to the necessity of overcoming the harsh and distant environment faced by Australia’s early farmers. An early example of such innovation is the stump-jump plough, invented by Richard and Clarence Bowyer Smith as a way of cultivating land that had not been entirely cleared of deep tree stumps. Mechanical refrigeration was pioneered in Australia, by Geelong engineer James Harrison, to enable clipper ships to deliver frozen meat to European markets. The combine harvester, invented in America, was perfected by Hugh McKay in Victoria is the 1880s. Even Qantas, Australia’s national airline and one of the world’s oldest, was born in 1920 to service the rural community of the Queensland outback. These are just a few of many examples – Australia is perhaps the world’s best example of a nation rising from the soil and built by those who live by it. Australia’s history is largely built on the nation’s relationship with the soil, and its present was forged by it. In the 21st century, as the world changes faster than ever before, Australian farms and Australia’s farmers are entering a new era marked by advanced technology, innovative business practices, new markets and new horizons. Through it all, it has been Australia’s farmers that have shown the way and shouldered the burden. Farming is among the most difficult, and the most honest, ways to make a living, and nowhere is this truer than in Australia’s unforgiving environment. Australia’s farmers, we salute you.

Aboriginal land management The original inhabitants of Australia were hunter-gatherers, and did not practice agriculture as we define it today. But they were masters of land management, using techniques we are only now beginning to understand as we become more aware of the importance of sustainability and the need to properly manage scarce natural resources. Aboriginal communities used a technique called ‘fire-stick farming’. They would deliberately burn off tracts of land and leave other areas unburnt, to encourage native animals to congregate in areas where they were easier to hunt, or to encourage the growth of useful plants in certain areas. Over many centuries, Aboriginal people were able to shape the landscape to better suit their lives while also ensuring maximum sustainability. To the early settlers accustomed to the European countryside, fire was an enemy. Burn a tree in England and it stays burnt. Burn one of Australia’s hardy perennials and it comes back green and renewed the following season. It took generations for many Europeans to understand this. Bill Gammage’s remarkable book about Aboriginal land management – The Biggest Estate on Earth: How Aborigines Made Australia – describes the Aboriginal concept of The Law: it is an “ecological philosophy enforced by religious sanction” that ensured Aboriginal people cared for their country, and were even compelled to do so. Their chief tool was fire, applied selectively and carefully. Aboriginal people also altered watercourses, damming creeks and draining marshes to help mould the land to their advantage. “What plants and animals flourished were related to their management,” writes Gammage. “As in Europe land was managed at a local level. Detailed local knowledge was crucial. Each family cared for its own ground, and knew not merely which species fire or no fire might affect, but which individual plant and animal, and their totems and Dreaming links. They knew every yard intimately, and knew well the ground of neighbours and clansmen, sharing larger scale management or assuming responsibility for nearby ground if circumstances required.” Gammage details the intricacies and sophistication of Aboriginal land management in Australia, how they used essentially simple techniques in a complex manner to optimise the abundance of the landscape to suit their purposes, while at the same time imposing “a strict ecological discipline on every person.” Early European settlers, and many since, knew nothing of the way the Aboriginal people had shaped the Australian landscape. What they thought was wilderness was not wild at all – it had been moulded and changed by human hand over many millennia. Many of the techniques Aboriginal people used, and perhaps most importantly the philosophy of stewardship they developed, are only today being properly understood. Australian farmers are increasingly realising that they are but custodians of the land, and that it is up to them to ensure its continued viability for the generations that follow. That is the Aboriginal way. ‘The Earth Abideth Forever’ was the title of the fourth volume of Charles Manning Clark’s masterful history of Australia. It is a quote from the Book of Ecclesiastes, but it may as well have been taken from Aboriginal legend. The fragile Australian landscape, so abundant in good times and so unforgiving in bad, must be carefully managed to ensure its enduring legacy. The Aboriginal people knew this eternal truth. Modern Australia is still discovering it.

Here’s to the Aussie farmers, the men and women of the soil Here’s to their pioneer spirit, and their hard unceasing toil Here’s to their quiet achievement, the way they’ve tamed the land They’ve done more to build this nation than we will ever understand. Australia is a hard land, from the mountains to the plains The poets they write of struggle, and of droughts and flooding rains But there’s more than that, there’s what you need to tame this distant shore Half a world away from where they came and what they knew before. When first they broke the soil and when first they tended sheep They were young and the land was old, they woke it from its sleep They crossed the mountains and the rivers, they found the great Outback They found a land and made a stand without ever looking back. But the soil was thin, the land was dry, the bush was hard to tame They persevered through rough and smooth and learnt how to play the game They worked out how to grow food as good as any you can find It’s grown with care, and sometimes a prayer, it helps feed all of humankind. The land yields orchards full of fruit, and wheat and wool and wine And sugar cane and bags of rice, and meat of every kind Beef and pork, and lamb and chook, and fish from out the sea All done in a way, it’s hard to say, but so … efficiently. So here’s to the Aussie farmers, and the way they work the land The way they’ve built a country with the work of their own hands Here’s to the Aussie farmers, there’s none that can compare With what they’ve done, and how they’ve won, a land so hard and bare. Graeme Philipson is a contributing editor to Boundless Plains to Share and an award-winning journalist and poet. He was born on a grazing property in the Riverina and grew up in Tamworth in northern New South Wales.

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What Asia wants With the rise of the Asian middle class, what do Asian importers and Asian consumers want from Australia?

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03/WHAT ASIA WANTS

What Asia wants Asia is the largest food consumption market in the world. The continent hosts over 50 per cent of the world’s population, and is expected to increase from 4.3 billion people in 2015 to 5.1 billion by 2050.

hina and India together account for 28 per cent of world cereal consumption and nearly 40 per cent of palm oil consumption. China alone accounts for 25 per cent and 27 per cent of world soy and meat consumption respectively, including 52 per cent of world pork consumption. The total GDP of what is known as ‘Emerging Asia’ (which includes India and China but excludes Japan) overtook that of the EU in 2016. Additionally, India is the fastest growing large economy in the world today – with the International Monetary Fund (IMF) predicting India’s growth in 2016-2017 at 7.5 per cent – remarkable compared to the global growth forecast downgrading to 3.2 per cent this year. Changing demographics is the key driver transforming food consumption patterns in Asia. According to The Brookings Institution (an American think tank), by 2030 the Asia Pacific region will cater to 59 per cent of middle class consumption (India 23 per cent; China 18 per cent). India has the largest youth population in the world with 650 million people (more than half the total population) under 25 years of age. It is also home to the second largest English-speaking population in the world after the United States. Interestingly there are over 220 million smartphone users, making India the world’s second-biggest smartphone market. The combination of young, increasingly affluent consumers and rapid technology advancements are creating structural changes in which food is distributed and consumed. Recent reforms which allow 100 per cent foreign direct investment (FDI) in food retailing in India is another avenue investors can tap. Across Asia, consumption of high value protein foods, such as poultry, dairy, fruits and vegetables is increasing at a faster pace compared to staple foods. This trend follows the established correlation between GDP and the share of protein component in food. Growth in modern trade is also facilitating experimentation and innovation in processed and packaged food. For instance, whilst overall rice consumption in India per capita is lagging behind population growth, the organised, branded rice market is growing at 15 per cent per annum. From a supply side perspective, Asia will continue to remain a structural import market as resource constraints are key impediments to growth in agricultural production. As an example, India has 2 per cent of the world’s

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land area and 4 per cent of its water resources, while hosting 17 per cent of the population. The 2030 Water Resource Group estimates India to have a 50 per cent water gap by 2030. Asian agriculture continues to face several other internal and external risk factors such as land fragmentation, climate change, low technology adoption, soil degradation, rising cost of production (particularly labour cost), poor post-harvest infrastructure and inadequate market linkages. On the demand side, Asia is also far from a single market. Customs, culture, religion, language, food habits, agriculture productivity, regulatory environment and distribution channels vary widely across the key markets. Even within countries, there are differences – it is said that food habits change every 100km in India. In China, limited land and water resources, relatively low production efficiency, rising production costs and concerns over food safety have prompted the country to further increase the share of imports as well as outbound merger and acquisition activities to secure offshore assets and supply. However, China’s slower growth has had a profound impact on the global commodity markets; and global exporters need to develop other markets such as India, Indonesia, Myanmar, and Vietnam. In India, despite structural challenges, such as fragmented landholding, low productivity, dependence on monsoon impacts and high waste through a multi-layered supply chain, the country is among the top producers of several agricultural products, including sugarcane, rice, milk, fruits, vegetables, tea and spices. Foreign companies and institutions have a significant opportunity to work with the Indian government, farmers and the private sector to deliver modern technology and knowledge in order to improve practices, productivity, quality and traceability. This long term approach will help grow India as a strategic sourcing base for agricultural produce. This is a win-win situation for all stakeholders, and several Indian state governments are keen to provide funding and other support to overseas investors to promote public-private-partnership projects and link farmers to markets. The New Vision for Agriculture (NVA), a global initiative of the World Economic Forum, has catalysed multi-stakeholder partnership platforms in 20 countries in Asia, Africa and Latin America. These include partnerships

with five Indian state governments and involve the private sector in several commodity value chains. Specifically for Australian agribusinesses, pulses and dairy products are two clear areas of opportunity. Despite being the largest producer of pulses, India is also the largest consumer and may have to import over 35 per cent of its consumption demand in coming years. Dairy also offers great opportunities for value-added products for both domestic and export markets. Similar opportunities exist in several other regional products and segments in the value chain, such as post-harvest storage and logistics management. Other emerging markets (especially Indonesia, Vietnam and even a rapidly modernising Myanmar) desire high-value and traceable meat and dairy products to feed their urban centres. The new government in Myanmar in particular has a great opportunity to boost agriculture productivity and enhance rural development through smallholder development. Asian agricultural policy has hitherto been biased towards creating self-sufficiency in food production. However, going forward, several factors will drive Asian countries to integrate more closely with global food supply chains. Urbanisation, economic aspirations and changing food consumption patterns coupled with modern retail formats and ecommerce will put pressure on the domestic supply side. In order to play a greater role in the global food commodity trade, Asian agriculture needs to become more sustainable, productive and resource efficient. Local and regional consumers demand safety and quality-assured foods that are traceable and come via suppliers with good agricultural practices. Competing against top global food brands requires meeting them head-tohead with high quality standards, while leveraging local market expertise to provide a more attractive local offering.

As Asian populations continue to advance, an evolving food culture provides opportunities for high quality food companies, domestic and abroad. The race to capture these markets starts at the top, leading with quality assurance that is communicated to local consumers in an accessible and affordable way. In order to make Asian food industries integrated with the global food chain, both local companies and multinational corporations need to demonstrate leadership in working together with domestic supply chain partners, farmers and larger stakeholders in a collaborative manner. This has implications not only for a companyâ&#x20AC;&#x2122;s success, but in addressing larger issues such as food security, farm gate income, rural prosperity and resource efficiency. The governments of Asia need to play the role of catalyst, creating favourable polices and enabling infrastructure. There is a growing imperative for all stakeholders to cooperate and collaborate to accelerate this value chain revolution.

ABOUT THE AUTHOR: Asitava Sen has over 20 years of experience in corporate banking, strategic business advisory and research focused around the food, agribusiness, retail, consumer and services industries in India and the Middle East. He is currently senior agribusiness specialist with the International Finance Corporation (IFC), based in New Delhi. He also advises the World Economic Forum for their New Vision of Agriculture (NVA) initiatives in India. Prior to IFC, he held various senior management positions at Rabobank, PricewaterhouseCoopers and Nielsen Company among others. For more information on IFC, visit www.ifc.org

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What is Asia? There is no such place as Asia. Or rather, there are a dozen different Asias. Asia is a much more diverse area than Europe, which is by comparison relatively culturally homogeneous.

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he very concept of ‘Asia’ is an invention of early European cartographers. Even today, many people think of the world’s largest and most populous continent as a single entity rather than the vast and polyglot region it is, housing well over half the world’s population. From the frozen Siberian tundra to the jungles of Borneo, from Japan’s glittering cities to the abject poverty of the subcontinent, Asia is an amazingly varied place – as varied as the world itself. Asia has it all. When considering the Asia Pacific there are four main regions: China, Japan and Korea, South Asia and Southeast Asia (sometimes called ASEAN). Further west the ex-Soviet republics of Central Asia and most of the Middle East, while technically in Asia, are generally not included as part of the region. Most global companies talk of EMEA (Europe, Middle East and Africa) as being separate from Asia. CHINA ‘Greater China’ is a term used to describe the sum of the varying parts of China. The largest by far is the People’s Republic of China, once but not often today referred to as ‘mainland’ or ‘red’ China. The People’s Republic is the latest iteration of the Middle Kingdom, the Celestial Empire, Marco Polo’s famed Cathay. Greater China incorporates the Special Administrative Regions of Hong Kong and Macau (previously colonies of Britain and Portugal respectively), Taiwan and Tibet. Taiwan, where Chiang Kai-shek’s Nationalists retreated after their defeat by the Communists in 1947, remains a separate country but is still regarded by China as a renegade province. It is still economically a part of China and is likely to eventually return to being a political component as well. Tibet, ethnically and culturally distinct, has essentially been absorbed into the People’s Republic. So have Manchuria in the north and the vast province of Xinjiang in the west, which were not historically part of the country. With a massive land mass and nearly 1.4 billion people, Greater China is a very diverse place. There is an invisible line drawn across the country dividing the north from the south, each section characterised by a different language, a different diet, and different customs. The North is politically dominant, the South economically so. The North is too cold to cultivate rice; in the warm South it is the staple – a difference that has led some to refer to the division between the two Chinas as the ‘Dumpling Line.’ In the 21st century, China has become the workshop of the world. Massive economic growth has found many millions of its vast population entering the middle class and demanding the desires and comforts that the global middle class enjoys. The increased affluence of China’s population has great consequences for Australia: China is now our largest trading partner and the largest importer of Australian agricultural produce. SOUTH ASIA The second Asian regional giant is composed of the countries within and abutting the Indian subcontinent: India itself, Pakistan, Bangladesh, Nepal and Sri Lanka. They form a region as large, populated and heterogeneous as Greater China. South Asia is not as wealthy as China but its economy is growing quickly – particularly in India, which, like China, has a large and increasing middle class. It has a younger and faster-growing population than China, though, with India’s population set to surpass China’s by mid-century. India has become well known in recent years as an information technology

powerhouse, but what is not so widely appreciated is the way in which the country’s society is evolving. There is now a vast middle class living a largely Western lifestyle and holding Western aspirations. Australian agricultural exports to India are soaring, with a strong demand for lamb in particular. A high level of Indian immigration to Australia is also strengthening ties. The other South Asian countries – Pakistan, Bangladesh, Nepal and Sri Lanka – are smaller, possess less dynamic economies and are racked with internal strife. But with a massive combined population, even these less stable places are becoming increasingly important in the global marketplace. Australian trade and political and cultural ties with all of these countries are growing. A shared love of cricket helps too, of course. JAPAN AND KOREA Like China, Japan isolated itself from the West for many years and developed its own unique culture. Though much of it was originally derived from China, it evolved separately into a very different set of practices and traditions. This may not have been the case had Kublai Khan’s invasion fleets not been blown away from Japanese shores by the ‘Divine Wind’ (kamikaze) in the 13th century. Japan has a refined culture and cuisine, as well as an affluent population. That population is declining as the overall population ages, and unlike many countries Japan is not looking to immigration to reverse the trend. It remains one of the most ethnically homogenous countries on earth. But Japan remains an economic giant: it has only recently been overtaken as the world’s second largest economy by China, which has ten times the population, and remains a large market for Australia’s agricultural and processed food sectors. It has a strongly-protected local agricultural industry, but economic necessities are slowly lowering the barriers. Korea has a large and growing economy and is closely tied economically, ethnically and culturally to Japan. Its cuisine and trends in tastes are also similar to Japan’s, and in many ways the two countries can be thought of as the one region (though let’s not mention North Korea). SOUTHEAST ASIA The many countries of Southeast Asia – to the East of India and to the south of China and Japan – are often regarded as a single region. These countries are of course very diverse, but none of them have the demographic, economic or cultural clout to stand alone or dominate their neighbours like China, India or Japan do. For many years now these Southeast Asian countries have been loosely coupled economically and politically as ASEAN (the Association of Southeast Asia Nations), which is often used as a shorthand way of describing the region. The largest country of this region in terms of population is Indonesia. It is very important to Australia politically, as a glance at a map shows. While its economy is growing, its average income remains comparatively low. It is also a large market for Australian beef. Other populous ASEAN countries are Thailand, Malaysia, the Philippines, Vietnam and Myanmar (formerly Burma). Their economies are at various stages of development, while those of Cambodia and Laos remain quite small. The ASEAN countries are very important to Australia politically and economically. It is the closest part of Asia to Australia and a popular destination for Australian tourists. The region is an increasingly important market for Australian agricultural products.

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The view from China: AAAA rating of Australian foods Chinese consumer acceptance of Australian foods has grown rapidly over the last five years. The core driver is a significant increase in consumer concern about the safety of Chinese domestic produce: higher income earners in China are concerned about their families and are increasingly looking for ways to obtain safe overseas food products from countries such as Australia.

There are four purchasing trends that have emerged as critical to Chinese consumers in the market for food products: 3 Authenticity 3 Affordability 3 Access 3 Awareness The Authenticity of a product’s source has emerged as the number one priority for Chinese consumers buying food products. Recent examples of local Chinese processing operations contaminating overseas-sourced produce (blueberries, for example), coupled with a general loss of faith in the ethics and controls within Chinese domestic production, has heralded a shift in Chinese consumer preference towards foreign-produced foods delivered to China in a final, individually packaged, shelf-ready form. Bulk food product integrity can be easily compromised at any stage of the production and packaging process: inappropriate handling during washing, cutting and packing, suboptimal temperature control in storage and transportation – the list goes on. In the worst cases, inferior local Chinese or foreign products are mixed with Australian produce before being labelled and marketed as ‘made in Australia’. This has created mistrust in the eyes of consumers, who have started to address this concern by seeking reliable and trusted distributors. In China, a ‘trusted distributor’ business model known as ‘daigou’ (pronounced ‘di-go’) has developed in recent years. Essentially, Chinese nationals living overseas ‘buy on behalf of’ their Chinese relatives, friends and customers and offer a personal, reputation-based guarantee of authenticity. Daigou originally began within the European luxury goods market, where profits were made from differential import duties placed on the items. In the context of Australian produce, daigou shopping lists usually include items like infant formula, vitamins, Manuka honey, skincare products and organic baby foods. Some brands have become very popular among Chinese consumers solely by being sold by daigou service providers! Whilst daigou may represent a disrupting force in both markets, it also

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offers trustworthiness to consumers through product authenticity and proof of purchase (with infant formula, for example, Chinese consumers can be sure it is the same product that Australian mothers are using) as well as timeliness of delivery to the consumer. That is why Chinese consumers do not seem to mind paying a premium to buy Australian foods via daigou. When it comes to affordability, products labelled ‘Australian made’ are by no means a cheap option. Higher production costs can put Australia’s high-quality products at considerable risk of losing market share to competitors, namely Brazilian and Uruguayan beef, wines from Spain, Italy and Chile, and infant formula from New Zealand. For commercial customers, it has always been price that drives purchasing decisions. In general, products at lower price points are much preferred to higher value, premium products that cost more. For consumers, given the very short history of educated consumption of imported foods, the benefits of Australian beef (being disease and hormone free and having a better taste) can easily be undervalued in light of the better packaging and aesthetics of beef produced in other countries. Those who are able to afford Australian foods can be classified into 3 groups: 1. The ‘must have’ market, mostly comprising parents buying infant formula and red meats for their growing children. This segment has the lowest elasticity of demand; that is, buying propensity is not very highly correlated with levels of disposable income; 2. The ‘nice to have’ market, comprised mostly of wealthy middle-class buyers seeking nutritional supplements and health foods not only for themselves but also for their families and elderly relatives; and 3. The ‘gift givers’, who are motivated by reputational injury arising from adverse impacts of any poor quality products they provide to others. This group is also motivated by the desire to differentiate their presents from traditional gift giving standards. High quality food products from Australia are very popular within China’s gift market when presented in premium packaging, which is seen as signalling quality. This is quite a challenge, as Australia’s ‘low key’, environmentally

friendly packaging often requires a considerable face-lift to appeal to Chinese gift givers. It is not uncommon for the cost of re-packaging to significantly exceed the cost of the product itself. To be able to afford authentic Australian foods is one thing; getting access to these foods is another. Currently, consumers in China find Australian foods through a variety of convenient channels, including: n Department stores and supermarkets (most have areas dedicated to imported foods) n Australian specialty stores n Online stores n Daigou suppliers In an environment where intimate product knowledge is sparse and unsafe food has become the norm, consumers place huge trust in their choice of channels when purchasing imported foods. As a result, the credibility and track record of the point of sale is vitally important for consumer decision-making, which directly translates to revenue growth for the Australian product owner. Whether it is through the traditional way (such as supermarkets), the new way (specialty stores), the popular way (online) or the trendy way (daigou), ultimately accessible and authentic products at affordable prices will win the heart of consumers.

Public awareness of Australian brands has evolved and continues to do so. There are different levels of brand perception in China: the general ‘Australia’ brand for bulk products like beef and canola, state brands such as Tasmania’s (known for its cherries and seafood), regional brands associated with product categories like wine, and individual brands like Penfolds. With continued education of the consumer market over time, there is no doubt that more and more successful individual brands will continue to emerge. As with all success stories of international products in China, it will be the individual brands of Australian food produce that ultimately govern loyalty and guide consumers’ purchasing decisions.

ABOUT THE AUTHOR: Hui Li is the co-Founder and Executive Director of VC Group, a specialist advisory firm that helps Australasian and Chinese businesses with bilateral trade and investment in food and agriculture. She has over 18 years’ experience advising foreign companies making direct investments in China and Australia, including seven years in China’s Ministry of Commerce and 3 years as Senior Manager of China Practice at PricewaterhouseCoopers.

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The view from Japan: Significant opportunities for Australian food products Among Japanese consumers, Australia is famous not only for its kangaroos and natural landscapes, but also for its gourmet cuisine: meat, seafood, wine, fresh fruits and vegetables and unique fusion dishes.

he most respected food publication in Japan, Oishinbo (circulation of over one hundred million), has covered Australian food and cuisine many times and has contributed to the creation of this image of Australian food culture in the mind of Japanese consumers. Indeed, Australian foods and agricultural products are now entrenched as a part of the Japanese diet. In 2015, Australian export of food and agricultural products to Japan reached US$3.1 billion, making it the 5th largest exporter of such products to Japan. Beef accounted for more than half the value of Australia’s food and agricultural exports to Japan, and Australia is Japan’s largest source of imported beef. Popularly referred to in Japan as Aussie beef, it is one of the Australian products most recognised among Japanese consumers. You can find Aussie beef in almost all supermarkets, and it has become a popular alternative to increasingly expensive domestic products. Due to the ageing of Japan’s beef cattle breeding farms and the declining number of dairy farms, the number of calves has been decreasing rapidly to the point that calf prices reached a historic high in March of 2016 – up 25 per cent from the previous year. While the price of imported beef has also been increasing it is still about half the price of Japan’s domestic Wagyu and is therefore often sought after by Japanese consumers as a more affordable everyday option. With the Japan-Australia Economic Partnership Agreement (EPA) having gone into effect in January of 2015 and the Trans-Pacific Partner-

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ship Agreement (TPP) having recently been signed, the current relatively high tariff on beef (38.5 per cent) will be decreased significantly (down to 9 per cent within 16 years), a favourable result for those exporting Aussie beef. Other commonly imported products include: cheese, rapeseeds, wheat, sugar, marine products, oranges and wine. Despite Japan’s shrinking population, most of the Australian companies exporting these products have the opportunity to expand their markets. For example, Japanese consumption of cheese and wine is rising rapidly, obviously at a growth rate past what domestic production can keep pace with. Import volume in Japan of Australian oranges is second only to oranges from the U.S., and there is good potential for expanding Australia’s presence in the Japanese summer orange market. Most of the other popular Australian exports to Japan – cheese, rapeseeds, wheat and sugar – are used as ingredients in the food industry, presenting limited opportunities for Japanese consumers to become aware of the products’ country of origin. In Japan, opening up the country for agricultural imports is still a controversial topic and the TPP in particular has faced fierce opposition from farmers, agricultural associations and consumer organisations. While the fear that cheap agricultural imports will affect Japanese farmers holds a deal of truth, Japanese agriculture – and its society in general – is facing the more fundamental and pressing issue of an ageing population and an extremely low birth rate. In a press conference held last year, the new head of the Central Union of Agricultural Co-operatives (JA-ZENCHU) admitted that if ageing and farm retirement trends continue at the current pace, Japanese agriculture would collapse in 10 years. Japan, where consumers generally prefer buying domestic products to imported ones, is thus faced with two major challenges: to energise the domestic agricultural sector and secure an adequate supply of domestic products, and to compensate for decreased agricultural production with secure access to safe, imported foods. Australia, with its clean and natural image, is

therefore in a good position to sell more of its products to Japan and satisfy Japanese consumers’ need for safe and high-quality products. In addition to the opportunities open to Australia in the Japanese market, there are also numerous investment opportunities for Japanese companies within Australia. Australia has long been an attractive destination for investments from the Japanese food industry, and a number of Japanese companies have already invested in Australian agriculture in order to secure supplies of raw materials, manufacture processed foods, or expand stock to supply sales in the Asian and Oceanian markets. Japanese companies investing in Australian food and agriculture include Nippon Ham (beef), Kirin (brewery), Mitsui (grain) and Kagome (vegetables). Due to the rapidly shrinking Japanese market, Japanese food manufacturers are increasingly faced with pressure to expand their business outside Japan; Australia is seen as a good business base for expanding into the ASEAN market, the priority market for the Japanese food industry. In the last year, Japan’s Ministry of Agriculture, Forestry and Fisheries initiated a new program aimed at identifying opportunities for investment in food value chains across Northern Australia. With the TPP signed and Regional Comprehensive Economic Partnership (RCEP) under negotiation, Australia is likely to continue to both draw attention from, and offer solutions to, the Japanese food industry.

ABOUT THE AUTHOR: Ayako Kuroki and Chisa Ogura are senior consultants at Promar Consulting, a Tokyo-based, international research and consulting firm specialising exclusively in global food, fisheries and agribusiness markets. Promar Consulting works throughout the world to assist private companies, trade organisations and governments to access markets, improve strategies and explore business opportunities.

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The view from Korea: A growing awareness of Australian food products T raditionally, the Korean government has been vehemently opposed to opening up the country’s agricultural markets under multilateral trade agreements. But attitudes changed in the early 2000s when the Korean government negotiated its first free trade agreement (FTA) with Chile. Since then, the country has become much more open to importing agricultural products. As of 2016, Korea has FTAs with 51 countries including the United States, the EU countries, ASEAN countries, Australia and New Zealand. Korean consumers are now increasingly familiar with meat, fish, wine, dairy products, fruits and other foods coming from these countries. Australian products have a disadvantage in the Korean market because the Korea-Australia FTA only came into force in December 2014, two years later than the Korea-US and the Korea-EU FTAs. Despite this, the reputation of Australian agricultural products can lead to greater opportunities as Korean consumers see Australia as a source of clean, safe and healthy food and fibre. Beef is Korea’s most important agricultural import from Australia. Scared off by the threat of mad cow disease, Korean consumers did not purchase US meat for some years after the Korea-US FTA took effect. As a result, Australian beef is more popular in Korea than American beef – Australia is the origin of more than half of the imported beef in Korea. 2015 saw an increase in Korean imports of Australian beef by 15.4 per cent, and it is expected that Koreans will consume even more beef as tariffs on Australian beef are lifted. Even other, less traditional sources of meat are becoming popular in Korea: though mutton is not frequently used in home cooking in Korea, the number of restaurants serving lamb has increased recently. Australia is now the largest source for mutton in Korea, as import levels rose by nearly a quarter in 2015. As the typical Korean diet has become more westernised, consumption of dairy products such as butter and cheese has increased. After the Korea-Australia FTA was established, Australia became the second-largest source of imported butter in Korea. In 2015 alone, Korea’s imports of cheese and butter from Australia rose by 20.9 per cent and by 80.6 per cent respectively. Despite this rise, Australian cheese is still relatively unknown among Korean consumers, sitting behind cheese from the US, New Zealand, Italy, France and Denmark in popularity.

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Korea’s consumption of alcoholic beverages is very high, with consumers enjoying a variety of alcohols from rice wine and soju to beer, wine and whisky. Though traditionally Korean drinkers have favoured stronger alcoholic drinks, this is now changing. Initially enjoyed among young people at bars or restaurants, over the last ten years wine has become routinely consumed at home as well. With no tariff on wine imports, great opportunities have emerged for Australian exporters in Korea. Though currently behind the wines of France, Chile, Italy, the US and Spain in popularity, Australian wine has the advantage of being relatively new to Korean consumers. In light of this, it is likely that Korean demand for Australian wine will increase once Australian wine brands become more visible and familiar. Like its neighbour Japan, Korea has a rapidly ageing population. As a result, dietary supplements and super foods are becoming increasingly popular not only among older people but also within younger generations. Products such as Australian-made propolis and dietary supplements derived from green mussel and shark cartilage are becoming increasingly well known among Korean consumers. Once again, Australia’s advantage is its good image and a perception by Korean consumers that Australian products are clean and natural. It is expected that demand for Australian health and nutrition products in Korea will only continue to increase in the future. Despite growing tourism between the two countries, there is currently not enough information available to Korean consumers on Australian agricultural products outside of the beef, mutton, dairy and wine industries. The Korea-Australia FTA has increased Korean consumers’ awareness of Australian products, but in order to take full advantage of trade opportunities, it is crucial that the Australian agricultural industry make a greater effort in marketing their high-quality products to the Korean market. ABOUT THE AUTHOR: Hyun-Jung Je is a Research Fellow at the FTA and Regional Studies Department, Institute for International Trade in the Korea International Trade Association (KITA). She has written extensively on the Korea-Australia Free Trade Agreement and the Trans-Pacific Partnership (TPP).

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The view from India: lasting opportunities for IndianAustralian agricultural cooperation With 1.27 billion mouths to feed, food and nutrition security is the biggest challenge facing the nation of India.

FOOD SECURITY CHALLENGES IN INDIA The current average level of nutrition in India is less than satisfactory, and rising food inflation is only complicating the situation, especially for people living below the poverty line. Animal nutrition is another big challenge: a lack of sufficient growing resources has led to a feed and fodder shortage of 1.3 billion tonnes annually, as well as increased competition for land and water. If we look at the Indian supply-demand balance, the country has sufficient amounts of carbohydrates such as wheat, rice and sugar, but an acute shortage of edible oils and protein sources (including pulses). Today, India is the largest importer of edible oils and pulses in the world. Spending on imported edible oils is approximately US$12 billion, and US$3.5 billion for pulses. INDIA TOWARDS 2025 According to a government report, the population of India is expected to increase at the rate of 1.2 per cent annually to 1.4 billion people by 2025. Consequently, population density is projected to increase from 313 to 426 persons per square kilometre. Reports estimate that if its economy grows at 9 per cent per annum, Indiaâ&#x20AC;&#x2122;s per capita GDP will increase from the current US$1,600 to US$8,000-10,000 by 2025. This projection looks to be on the optimistic side, so let me use the more conservative estimated economic growth rate of 5 per cent annually and the resulting per capita income of US$3,000 to investigate the commodity requirements for India in 2025. According to an FAO study, food energy requirements in 2025 for the South Asian population will be about 2700 calories per person per day. In addition, edible oil demand is estimated to be about 17kg per person per year. This means India will consume approximately 23.8 million tonnes of edible oils by 2025. With an average yield of roughly 30 per cent oil from oilseeds, the country will need to import the equivalent of approximately 80 million tonnes of oilseeds. To sate this projected demand for oilseeds, India will need two vital natural resources: water and land. Demand for pulses at that point will be approximately 40 million tonnes annually, and if current production trends remain

the case the deficit will be around 20 million tonnes. The challenge to meet these demands only becomes more complex when you take into account the productivity in edible oils and pulses in India is stagnant and that there is an acute shortage of land and water, limiting greater production of these crops. AUSTRALIA AND INDIA CAN HAVE A LASTING PARTNERSHIP Australia has the land and natural resources to produce food for India. India is now, and will remain for the foreseeable future, the top market in the world for edible oils and pulses. It would be sensible for Australian companies to focus on edible oils and pulses if they wish to have a lasting commercial relationship with India. Other value-added products will in all likelihood remain a small segment of the market compared with these two major commodities. With other value-added products, a smart way forward for an Australian company would be to invest in India in place of trading from Australia. In a highly diversified country like India, logistical challenges and differences in local tastes and preferences cannot be handled from a remote location. Investment within India and a focus on value-adding through innovation and customisation are the way forward for any foreign investors wishing to tap into the potential of a projected market of 1.4 billion potential consumers.

ABOUT THE AUTHOR: Vijay Sardana is a well-known and experienced corporate manager, speaker, writer, author, blogger, corporate trainer and business advisor on subjects related to economic policies, agri-food products and rural and bio-economy. He is currently Vice President & Head of the Food Security Initiatives & Agribusinesses at UPL Group and a member of the Commodity Derivatives Advisory Committee of the Securities & Exchange Board of India (SEBI), as well as an advisor to the Poultry Federation of India and a member of the BRICS Business Council on Agribusiness.

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The view from Indonesia: Challenges in Australia’s largest cattle market

ince Independence, the Indonesia government has held a strong focus towards increasing food production through specific agriculture development programs. These started in earnest in 1947 with ‘Plan Kasimo’ followed by President Soekarno’s program of providing high-yielding seed, credit schemes and input subsidies to the agriculture sector, as well as improving rural infrastructure (roads and irrigation) and public investment in research and extension services. Despite the challenges of the last two decades (the Asian financial crisis of 1998 and the gaps in information sharing and extension caused by the implementation of local autonomy in 1996) agriculture in Indonesia today still makes up approximately 14.5 per cent of GDP (up to 40 per cent within Indonesia’s regional areas). However, despite a reduction from the level of 25 per cent of GDP in 1978, agriculture still directly employs approximately 41 per cent of Indonesia’s labour force, yet the sector receives only 5 per cent of the nation’s credit. In terms of trade, Indonesia’s agriculture trade totals approximately US$47 billion per annum, with exports comprising approximately 66 per cent of the trade balance. Agriculture in Indonesia is perceived to be largely the work of the poor, with a significant proportion of those involved living below the poverty line. Generally working on farms of approximately 0.5ha, small-scale farmers are usually focused on rice, soybean, corn, fruits and vegetables with many family members having some form of involvement. At the other end of the spectrum are extremely large plantations that are more likely to be focused on palm oil, rubber, coffee and cocoa, making Indonesia one of the world’s leading producers of these commodities. Of critical importance to Indonesia is the ability to meet the demands of a growing and increasingly affluent population in the face of increased land conversion (from agriculture to housing, industry or other purposes) and an ageing farmer population (with an average age above 50 years). Employment, traditional rights, purchase of land and land tenure all create further and significant challenges. The cattle sector has a significant place in Indonesia’s agricultural sector and is plagued by the same problems facing the rest of the sector. Local beef supply has not been keeping up with demand and by 2009 Australia was sup-

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plying more than 40 per cent of Indonesia’s beef demand – a figure deemed too high by many in Indonesia. Concern was raised that if Australia decided to pursue other markets, Indonesia would be left in very short supply and at the mercy of other traders. In 2010 a quota was imposed on trade and a program to boost breeding within Indonesia was initiated to lessen the reliance on Australian beef. By 2013 however, the impact of reducing trade without significant improvement in the cattle herd caused the price in wet markets to jump to unsustainable levels. This forced the government to establish regulations providing for less limits on trade and a minimum price trigger that would result in a reduced trade should it be reached. That trigger was never reached, the trade from Australia increased again and by the end of 2014 the government of Indonesia introduced new measures to boosting local production. The dilemma is a difficult one as the agriculture sector is very complex. The Indonesian government recognises the challenges, and their focus is towards a regional approach: improving competitiveness of farmers, providing infrastructure and enhancing good governance. But there is a long way to go and consequently a holistic approach is needed, especially as an increasing population drives food demand. With nearly 26 million small-scale farming ventures across the country, spending money on improving productivity, competitiveness and wealth in an unfocused manner can be likened to pouring water onto sand. To maximise efficiencies and create more dispersed growth in Indonesia, the agriculture sector needs to reduce its anxiety around trade and instead focus on improving the business and investment climate and building on its competitive advantages. ABOUT THE AUTHOR: Dr John Ackerman is the Deputy Secretary General of the Indonesia Australia Business Council and a Member of the Indonesia-Australia Partnership on Food Security in the Red Meat and Cattle Sector. Based in Jakarta for the last ten years, his previous roles include Regional Manager for Meat and Livestock Australia and Agricultural Counsellor for the Australian Embassy to Indonesia. He holds a PhD in Philosophy, Marine Biology and Ecology from James Cook University.

03/WHAT ASIA WANTS

The view from Malaysia: demand for organic and quality food presents opportunity

alaysia is Australia’s 9th largest trading partner, with two-way trade amounting to AU$18.2 billion in 2013. The volume of trade between the two countries is on the upswing since the Malaysia-Australia Free Trade Agreement (MAFTA) came into force in January 2013. Thanks to MAFTA, the following Australian agricultural and food sectors are anticipated to benefit: n milk — liberalised licensing arrangement for liquid milk exporters allows access for higher value retail products; n processed foods —virtually all tariffs are eliminated; n wine — Malaysia to eliminate the majority of tariffs for Australian exporters; n rice — open access arrangements from 2023, with all tariffs to be eliminated by 2026. The Malaysian government’s on-going campaign to encourage healthy living has spurred more demand and consumption of fresh fruit and vegetables, as well as healthier dietary habits. Growing consumer awareness in nutrition and healthcare — and an increasingly sophisticated palate — has led to greater demand for foreign food, ranging from exotic fresh fruit and vegetables to healthy or minimally processed foods and organic products. In 2011, Malaysia imported approximately AU$90.9 million worth of fruit and vegetables with just over five per cent coming from Australia. And according to Malaysian food importers, this amount will only increase in the future. Jacques Cosset, MD of Classic Fine Food in Malaysia, foresees local customers becoming more discerning: “One of the growing trends is the growth in demand for organic products: fresh produce (vegetable & fruit), dry goods (legumes & grains), sustainable seafood, etc. Even for the business-to-business channels such as hotels and restaurants, there are more requests for organic food products. Australia’s strong food industry could capitalise on this since sales in the business-to-consumer sector are growing by more than 20 per cent annually.” Another major food importing company, Euro Atlantic Sendirian Berhad, cites stone fruits, avocados, potatoes and ready-to-eat salads from Australia as the kind of food sought by the Malaysian market from Australia in the coming years. In light of Malaysia’s population growth, rapid urbanisation and the growing sophistication of consumers’ palate, meat imports are set to increase in

the near future. Although Malaysia is self-sufficient in poultry, pork and eggs, about 80 per cent of its beef requirements are imported. Australian meat exporters may benefit from that as Australia’s meat products are viewed as fresh, safe and nutritious by Malaysian consumers. High urbanisation has also caused Malaysian consumers to favour dining out instead of cooking and eating in after working hours. Coupled with the abundance of food service outlets operating around the clock and the appeal of international grocery retailers whose one-stop ‘superstores’ offer convenience and greater perceived value for money, the food service market in Malaysia is a sizeable one and will continue to grow. The processed food sector in Malaysia was worth AU$7.48 billion in 2011, and is expected to hit AU$8.02 billion by 2016. As such, Australian expertise in natural food additives and flavours, readyto-eat meals and customised formulations means there is great potential for further growth. Potential clientele includes hotels and resorts, restaurants and the institutional sub-sectors. Malaysia also wants to attract more foreign direct investment to unlock the market value of local herbal products, by conducting research on Malaysian herbs and establishing food manufacturing facilities. Australia should also explore joint ventures with local food manufacturers to fulfil rising demands of halal markets with sizeable Muslim populations in ASEAN, the Middle East, European and US markets. Halal food products not only comply with set religious requirements, but are also high quality in terms of cleanliness and sanitation. Malaysia’s halal certification is globally recognised so any partnership in this area would augur well and has the potential to be mutually beneficial. With a potential estimated market value of between AU$816 billion and AU$2.86 trillion, Malaysia aims to be a global halal leader in line with its government-led Halal Industry Master Plan. This is just one area where Australian food companies could look to gain an advantage in allying with Malaysia. ABOUT THE AUTHOR: Alice Yong is an author, blogger and food reviewer based in Kuala Lumpur. Her book, Not Just A Good Food Guide to Kuala Lumpur, was a finalist in the World Gourmand Cookbook Awards. She is also Managing Editor of InnoCreative, a quarterly food and beverage/ hospitality trade magazine and a member of the judging panel for the Malysia Tatler Best Restaurants Guide 2014/2015.

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The Business of Australian Agriculture Why agriculture is a business â&#x20AC;&#x201C; the importance of marketing, finance and insurance and evolving business models.

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04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

The intersection of agriculture and business As the mining boom has gone off the boil, we’ve heard a lot about the coming ‘dining boom’. In recent times, many experts have identified agribusiness as the next big industry for the Australian economy. But just what is agribusiness? Asks JAN DAVIS, former CEO of both Agribusiness Australia and the Tasmanian Farmers and Graziers Association.

gribusiness is defined as the business sector encompassing farming and agriculture-related commercial activities – all the steps required to get an agricultural product from paddock to plate, or from farm to fork. It covers the supply of agricultural inputs, the production and transformation of agricultural products and their distribution to final consumers. It includes suppliers of farm inputs such as agrichemicals, plant and animal breeding, seed supply, crop production (farming and contract farming) and farm machinery. It also includes businesses that are involved in the marketing and distribution of farm products, such as warehouses, wholesalers, processors, retailers and more. As well, it extends to the financial services, consulting and advisory sectors. Agribusiness activity is as a rule characterised by base raw materials that are perishable, variable in quality and not regularly available. The sector is subject to stringent regulatory controls on consumer safety, product quality and environmental protection. Business efficiencies in the sector are driven by increasing cost/price squeezes and rapidly developing technologies. This has meant that traditional production and distribution methods are being replaced by more closely coordinated and better planned linkages between agribusiness firms, farmers, retailers and others in the supply chains. As a result, the term ‘agribusiness’ is most often used to emphasise the interdependence of these various sectors within the production chain. However, among critics, agribusiness is often used in a negative sense; synonymous with so-called ‘corporate farming’, which is depicted as largescale, industrialised, vertically integrated food production. As such, it is often contrasted with the family-owned farm business model. Data released by the Australian Bureau of Agricultural and Resource Economics (ABARES) in 2016 confirms that family farms remain the backbone of Australian agriculture – despite a declining number of farms, increasing foreign and corporate ownership and a trend towards large-scale enterprises. The best and biggest family-owned farms are also as profitable as corporate farms. In fact, many family farms outperform corporate farms, generating higher rates of return and profits over recent years. Family farms have also provided most of the capital that underpins the $60 billion Australian farm sector. Every year, more than $2 billion is added to the value of the productive assets of the Australian farm sector. Between 60 to 70 per cent of that invest-

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ment is provided directly by the owners of family farms; with less than 20 per cent coming from the corporate sector, including foreign investors. In fact, foreign investment in Australian farmland has remained constant over many years. The current situation is that only one per cent of our agricultural businesses and 11.3 per cent of our agricultural land are foreign-owned – hardly the tsunami some would have us believe. The official data show that around 90 per cent of farms are family owned and run by one or two people. These farms on average generate less than $1m each annually, and grow half of the nation’s food and fibre. In contrast, just 10 per cent of farms – all much larger enterprises valued at $10m plus – generate the other half of rural production. While many of these bigger enterprises started as family farms, they are now more likely to have complex multi-generational ownership, to be run over several properties, or to have corporate investors and/or management. The take-out message from the research is that there is little difference between high performing family-owned farms and corporate farms. While the line between the two is in some respects becoming more and more blurred, corporate agriculture won’t be transforming the family farm model in Australia any time soon. Having said that, the industry is nonetheless undergoing significant change. As global population marches towards 9 billion in 2050, never has the task of feeding people been more urgent – or more daunting. The United Nations Food and Agriculture Organisation has estimated that feeding this increasingly crowded world means international food systems will need to produce 70 per cent more food. In Australia, even though our domestic population is increasing, agribusiness is under pressure. Input and compliance costs are higher than our competitors, and rapidly changing market signals are often poorly understood on the supply side of the food value chain. Valuable agricultural land is being lost as our population grows and farms on the fringe of cities are gobbled up by housing developments. In addition, a changing climate limits the range of sustainable production in some areas. At the same time, agricultural productivity is stagnating. From an average of around 2.9 per cent per annum growth in the years between 1991 and 2000, it fell back to 1.4 per cent in the decade to 2011, and now sits below the world average of 1.7 per cent.

So, to stay in the game, Australian agribusiness will need to do more with less. The only way we can keep pace with increased demand is by ramping up productivity growth – through improved production or yield, and improved management of existing land and food resources. Agribusiness is the next frontier for the “innovation” economy, and the terrain is as vast as some of our farms. Ag-tech with its proliferation of novel, high-tech data gathering techniques – such as drones, sensors and GPS tracking devices – will provide the tools for unlocking the next wave of productivity gains. Mick Keogh, executive director of the Australian Farm Institute, says the ability to capture digital information at the farm gate is growing rapidly: drones, irrigators that monitor plant health and water requirements, GPS guided tractors, walk-over weighing scales – all these things allow us to capture a huge amount of data associated with farm production. The key, he says, is turning that flood of information into sensible, decision-supporting tools. The advent of digitised agriculture means farmers now have the ability to gain control over their farms in ways they would never have dreamed possible even a decade ago. Australian researchers and farmers are developing all sorts of data-driven applications to reduce costs and optimise land and water use. Farmers accustomed to speaking in terms of paddock or herd averages now have the ability to monitor and control inputs with far greater precision. In fact, in many cases, it is now possible to manage decisions down to the level of the individual plant or animal. “If you control everything to the optimal level, you increase productivity – it’s the old industrial principle that Henry Ford was on to,” says Keogh. “Digital technology really allows agriculture to do that.”

Applied across farm management in Australia, these new forms of digital agriculture will potentially add billions to farm profits and to the agribusiness sector more broadly. This new precision toolkit has meant many young farmers are approaching farming with a newfound optimism, reflected in the recent increase in enrolments in agricultural studies at tertiary level. Agriculture has delivered five consecutive years of strong growth; and forecasts for 2016 anticipate a record output of $57.6 billion in raw product forecast – up 8 per cent on the previous year. The opportunities for the agribusiness sector are enormous. We sit on the edge of the fastest-growing region in the world; we have world-class food safety and environmental credentials; we’ve got modern technologies; and we have a strong economy and employ skilled labour. However, if we are to capture these opportunities, significant investment will be needed from both public and private sectors. Given the relative immaturity of technology and data solutions, there is a pressing need for increased funding for R&D and for collaboration across the value chain. There is also a need for investment in basic infrastructure. In many areas, leveraging ag-tech to reap productivity gains will require faster internet access. Transport and logistics are also high on many lists. It is also clear that a supportive business environment is critical for addressing the challenges ahead. Improved knowledge and understanding of this business environment leads to formulating better strategies that make business transactions more efficient. These conditions will generate a climate in which participants in the agribusiness value chain can operate and grow, and – as a result – facilitate entrepreneurship, increase investment, and enhance market competitiveness and growth.

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04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

Prime industry Super performance There are over 100,000 farms in Australia. They employ a large workforce, many of them itinerant or seasonal. Prime Super has expanded from being a supplier of superannuation to this large and fluid workforce to become one of the leading financial services players in rural and regional Australia. CEO Lachlan Baird talks with GR A E ME PHILIPSO N about the challenges.

ince the introduction of compulsory superannuation in Australia in 1992, providing financial advice to workers has become a major industry in its own right. Prime Super has emerged as the market leader in the rural sector, managing the superannuation assets of over 130,000 employees in rural and regional Australia, most of them farm workers and health industry employees. Prime Super began its life in 1996 as the Australian Primary Superannuation Fund, when four broad-based rural funds pooled their assets. At first the funds maintained their separate identities, but in 2005 the decision was taken to fully merge them into a single entity that would be more competitive in the quickly evolving superannuation marketplace. Two other funds (Hort Super and the Australian Hardware and Timber Industry Fund) were also merged at around this time, and Prime Super as we know it today came into being. The changes were accompanied by a major marketing push to make Prime Super a more broad-based rural and regional fund. That push was expanded in 2014 with the merger with HIP (Health Industry Plan), which covered health and aged care workers. That deal saw Prime Super become the leading superannuation fund for workers outside of Australia’s capital cities, across a range of industries. CEO of Prime Super, and architect of many of the changes, is Lachlan Baird. “The superannuation environment doesn’t stop changing,” he says. “There’s always something happening somewhere. “Superannuation is now the largest pool of money in the marketplace. Governments will always want to tamper with it, or put more controls or regulatory oversights in place. It’s becoming increasingly complex. “We’ve just gone through a major overhaul with the introduction of MySuper across the industry. Since then a new government has come in and there is now talk of more changes. It’s an exciting industry because it is always changing.” But Baird says the biggest challenge is to change the understanding members and employers have of superannuation. “It still surprises me that many employers see superannuation as just another tax, as opposed to a benefit.

“They forget that the whole reason super came in was as an offset for pay rises. Rather than giving an employee a pay rise, you would put money into their super fund. Since compulsory superannuation was introduced it has always been part of an employee’s package. And many employees don’t understand that the super is theirs, and there are many long term benefits they will get out of the investment.” Prime Super offers superannuation largely for employees in the rural sector – not for the farmers themselves. Baird said this is a widespread misconception. “Farms are mostly small businesses. The owners are the farmers, they have their super tied up in their farm or in self-managed funds, run through their financial advisor or accountant. We look after superannuation for their employees. “We have a lot of small accounts from itinerant workers, which is one of the big challenges we face. Many of these people are totally disengaged with their super – a lot of them even forget about it. When they lose track of their super, we have to spend a lot of time trying to track them down.” Baird says it is also important to engage with the employers. “You’re a small business owner, you’ve got your business tied up in your super fund, you own a bit of property. But you need to be diversified so don’t have it all committed to your business – it makes sense to put a little bit of money in super. It doesn’t need to be a huge amount, but diversification means that when you come to retire it’s all not in one place. “That argument takes time, because most of those discussions we have are with the business owners and their financial advisors – and it is in the financial advisor’s interest that all the money is tied up with them as opposed to being diversified. It’s an interesting discussion.” A DIVERSIFIED ASSET BASE Baird says Prime Super has a slightly different focus to most super funds. “We try and invest around a third of the fund directly in infrastructure assets and property, to diversify away from the listed markets. We keep a close eye on where our competitors are, so we’re not too far away from the listed market point of view, but there’s a lot of volatility there. We try to take a little bit away

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where we can and invest directly so we get a stronger long-term return.” Prime Super’s current investment profile for its default MySuper investment option has a higher than average allocation to the infrastructure and property sectors (approximately 23 per cent). It has made a major investment in the new southern link of the Mornington Peninsula Freeway south of Melbourne. “We own a reasonable chunk of that road. It’s backed by the Victorian government paying us income for the next 25 years or so,” says Baird.” It’s a good example of the sort of investment we want to be making.” Prime Super has also invested in infrastructure debt via the Dampier to Bunbury Natural Gas Pipeline in Western Australia, and owns a major office building in Adelaide. It has also invested offshore, in gas facilities in Chile and Mexico, and in a UK water supply company. “It’s all about getting diversification into the investment pool, so we can ride through any of the significant ups and downs that occur in the listed markets.” Baird says that Prime Super’s asset mix is not too far away from the average Australian superannuation fund, but that it is increasingly taking a strategic view to invest less in the local stock market. “We’re concerned about over-valuation,” he says. “That’s why we have a lot more cash. Most funds are sitting below 10 per cent at the most in cash,

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but with 18 per cent we have a bit of flexibility. There’s a concern right now because property markets and the stock markets are pretty well valued, and they will turn down in the near future.” Baird says it is all about the long term. “Increasing disclosure is creating an environment where the average member gets more information than they really need. “For many of them this is too much information, which then leads to less than ideal investment behaviour. “For example, they might want to switch out of a balanced or equities options into cash when markets crash, which means they miss out on any subsequent recovery. They will also jump into share investments after a few years of strong performance. We need to balance things out in our own performance, and make our members realise that they need to as well.” Prime Super has $3 billion in assets under management, making it a moderate sized fund. It has 130,000 members, employed by 35,000 active employers. There are 34 staff, nearly half of them regional relationship managers.

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The graph shows the growth in Prime Super’s total asset base since 1999, with a big jump with the HIP merger in 2014. The investment side is outsourced, with Baird and his Investments Manager overseeing a group of external investment advisors. “We run a pretty lean shop internally,” says Baird. THE HIP MERGER Prime Super merged with HIP on 1 May 2014. At the time of the merger HIP had $740 million of assets under management, and around 19,000 members, making it about one third of Prime Super’s size. The deal was not without its critics, or its problems. “HIP was in a bit of a bind with the regulator, the Australian Prudential Regulation Authority (APRA),” explains Baird. “APRA was heavily involved in the whole merger process and how it was to be managed. “The outcome of that was the full board and CEO of HIP resigned prior to the date of the merger. It all ended up occupying a lot of board time. We had to make a decision about whether we should proceed or not. “We were aware of some irregularities right up at the very start, but the process of working it through was manageable. I had to make sure the board understood we could manage the issues as they arose. We then engaged pretty closely with the regulator and just worked our way through the process. “The outcome with the HIP board resigning and the CEO leaving probably created a cleaner merger, because you’ve only got one view that has to go forward. So the result of the merger was very, very positive for both funds at the end of the day.” The merger was criticised in some quarters as not being a natural fit. Some people saw a health super fund and a rural-based super fund, and could not see the synergies. Baird says the synergies were significant, to the extent that they were the key driver for the deal. “One of the key reasons for the merger is that health and aged care is one of the key employment industries within regional and rural Australia. Health care is actually the largest employer in rural and regional Australia, and it had been an area we were trying to get into.” Baird points to government data which says that health care and social assistance is Australia’s largest industry in terms of people employed, and one of the strongest growing. “It has 1.4 million workers, or 12.1 per cent of national employment. It is also the largest employer in regional Australia, with more than half a million jobs outside state capitals. “So there was a lot of natural tie-in between HIP and Prime Super. Before the merger Prime Super had an average member age around about 31, about three quarters male, with smaller account balances. HIP members had an average account balance of around $30,000, and they were largely female, with an average age in the mid-40s. “When you pull the two together it’s actually a nice mix – a better blend of age and gender, and a higher average account balance. So there were a lot of underlying benefits for both funds. And with a bigger scale we could employ more regional managers and sales and support staff. “We’re the super fund, we receive it and invest it. The transaction is exactly the same, so it doesn’t matter where people are employed. That’s the basis for a lot of the large industry funds.” Baird says Prime Super is open to the idea of other mergers, but that it was important not to try to be all things to all people. “Prime Super has retained its identity, and our focus on regional Australia means that we will not go down the same path as some of the larger funds,” he says. “We believe we can be more agile than the larger funds and get a better investment

performance. In the long term.” After the merger Prime Super initiated an overview which brought significant economies of scale, with consolidation of small accounts and savings from combining the overheads of the two operations. “But we also had higher marketing and compliance costs,” says Baird. “Our cost ratios are improving, but it is still a very fluid environment.” LOOKING AHEAD Baird sees a bright future for Prime Super. “We will continue focusing on rural and regional Australia. There are many opportunities there. We are trying to get more focus on infrastructure investment into the bush – it’s an area where we can see the huge benefits to employment.” He is not talking only about Prime Super’s investments, but trying to encourage governments and others to invest in rural infrastructure. “There are huge opportunities for things to be done, we just need a little bit of drive from the government. The government says industry just needs to go off and do these things, but when you look at large infrastructure investments you need governmental backing to get it started and give it a

bit of impetus. “The superannuation industry has the money to finance it, but government needs to take the initiative to actually make it happen in the first place. Better rail, better roads, bypasses of some major towns. We did the southern Peninsula Freeway to get traffic around Frankston down in Melbourne’s south-east. There’s no reason why that can’t be translated out into rural and regional Australia. “We’re trying to get a discussion started. At the National Farmers’ Federation conference last year I gave a talk about infrastructure investing and what we need to do to get the money invested. Many in government say there’s a huge pool of money in superannuation, so why don’t we invest more in infrastructure? “That’s an easy thing to say, but you need the opportunity. Prime Super just can’t make a decision to build a road to bypass Ballarat. You need the government to initiate it and give some surety that there will be a return. “With compulsory superannuation in Australia there is a massive pool of money. We should be making better use of it.”

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04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

The future of farming with BOQ In the past four years, the Bank of Queensland (BOQ) has made a concerted move to become more involved in agribusiness and agriculture in Australia. BPTS speaks to Brendan White, Group Executive for BOQ Business, about the future of financing agribusiness and the challenges and opportunities facing the sector.

stablished in 1874, the Bank of Queensland is one of the leading regional banks in Australia. Based in the agriculturally-rich area of Queensland and northern New South Wales (NSW), the bank has a long history providing financial services for agribusinesses. In 2012, BOQ made agribusiness one of their strategic pillars – signifying a greater focus on the industry as they aim to be a credible market alternative to the major lenders, with a greater focus on client service. To support this strategic focus on rural and regional Australia, the bank has four key agribusiness hubs across Queensland and NSW – in Rockhampton, Toowoomba, Brisbane and Dubbo. These hubs service the major agricultural centres of the region, providing banking resources and expertise specifically tailored to the agribusiness industry. Brendan White joined BOQ in 2012 to be the bank’s Group Executive for Business, with oversight for the Agribusiness sector. He describes BOQ as a niche player in the industry, focusing on bringing people with the right agribusiness skills and expertise into the organisation in order to build strong relationships and provide the best possible advice. “We’re a relationship bank; we’re not a transaction bank,” says White. “If you look at the broader farming community across Australia they’re very well-serviced by the larger organisations, so we’re really more focused on building long-term relationships and partnerships. We’re bringing the skillsets into the Bank necessary for understanding agribusiness and the sector.” To reinforce their reputation as a relationships bank, BOQ has a lower portfolio loading for its banking staff. This means that each individual BOQ representative takes on fewer clients, building stronger relationships with farmers and agribusinesses over a longer period of time. “We specifically keep our client portfolio loadings very low, so that our clients get the best service and the best support in terms of growing their businesses,” says White. White is a great believer in Australian agriculture, and believes the industry has a great opportunity to capitalise not only on the demands of the domestic market, but also the export market. The opportunities in the export market are particularly significant when you factor in the booming population (and related protein demands) of middle-class Asia. The future of Australian agriculture is one of myriad opportunities, but it is also a quickly-changing landscape. White believes it is the role of BOQ to stay ahead of the curve when it comes to trends in the industry, in order to better

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serve their farming and producing client base. “Our role is to understand what the industry trends are, and find places where we can add value – this could be in facilitating more digital and online interactions or understanding changing ownership patterns in terms of leasing or owning farming property,” he says. “Understanding the trends and how we can fit into this changing industry is crucial to building honest and transparent relationships with our clients.” One of the fastest-growing trends in agriculture and agribusiness is the use of farming data. With the ability to extract up-to-date and precise data across a range of areas – crop yields, livestock weight, water usage, soil quality or chemical use efficiency, just to name a few – farmers have access to more information than they have ever had before. Moving forward, this data could revolutionise how banks lend money and assess risk in the agribusiness sector. Banks could even potentially use farming data to develop specific financial products that are more suited to a farmer’s business requirements. “Farmers – our clients – are using that data to make better decisions in terms of their own productivity and profitability,” says White. “Understanding these decisions and having that data at our fingertips can make us a lot more efficient in making decisions, particularly risk-based decisions around lending and the provision of financial opportunities.” A greater emphasis on and better use of farm data could also make for easier communication between farmers and their banks, an area BOQ already takes very seriously. Hiring banking staff with the necessary skillsets to understand and analyse farm data greatly narrows the gap between the farmer on the land and the banker in an office. “Farmers know their land better than anyone. Sometimes this knowledge can get lost in translation when it’s put on paper in the form of a business plan or a loan application to a bank,” says White. “When you have the data there – and bankers who understand the data – coupled with the experience of the farmer and their own intuition, it makes for a far easier conversation.” Another growing trend in the agribusiness industry is the shifting ownership models for farm land and farm businesses. Owning and operating your own land is no longer the staple of the farm industry that it once was, and is no longer an option for many Australian farmers. More and more Australian farmers and farm businesses are separating property ownership from the operating entity.

This has necessitated an understanding that property ownership and the operating entity have vastly different rates of return and funding requirements over time. Property ownership delivers lower but stable long-term returns, with less variability and less liquidity and therefore more patient injections of capital. The operating entity, meanwhile, has the potential to deliver large returns in a short space of time with high levels of variability and liquidity, often requiring seasonal or short-term capital. “For investors, choosing the ownership model that best suits their needs can be a very difficult decision. Some investors may decide that they are happy to own the land, however they don’t have the skillsets or the capabilities to operate that entity,” says White. “Whereas an operating company would work around cash flow and annual returns, and would therefore need to be more aware of things like climate variability, working capital and shorter-term financing. “This is why it’s important to have advice at hand from people who understand the situation and the industry, something that we are trying to provide at BOQ.” In terms of the challenges facing Australian agriculture and agribusinesses, White is clear about the role investment needs to play in funding improvements to infrastructure and market access, as well as continuing the country’s stellar track record in research and development. “I think Australian farmers have world-best practices in terms of resourcefulness and using innovation to improve productivity and profitability,” he says. “It’s really important that we continue to invest in research and development because we’ve proven how far we can go using innovation.” By employing people with the right skills and knowledge, BOQ is able to stay ahead of the curve regarding trends in agriculture and provide the best possible service to their farming and agribusiness clients. “At BOQ we’re passionate about the people in the agribusiness sector but we also absolutely believe in the fundamentals of agriculture for Australia,” says White. “Having the right people in the right roles and bringing agribusiness specialists and agronomists into the organisation means we can better understand the risks associated with agribusiness and really build long-term relationships with participants in the sector.”

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04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

CBRE and the rise of the agribusiness asset class The agricultural and agribusiness real estate environment in Australia has undergone significant change in recent times as more and more investors begin to recognise the industry as an alternative asset class. International real estate firm CBRE has a wealth of knowledge and expertise in the industry that positions them as a leader in the market for large agricultural properties.

nvestment in agriculture and agribusiness – particularly foreign investment – is something of a hot topic in Australia at the moment. This situation has come about as a result of the rising interest in agribusiness and agricultural property from large and institutional investors, both local and international. “In the past, agricultural real estate was seen as operating real estate – meaning you owned or leased it only if you were interested in operating it as a farmer, it wasn’t really seen as investment real estate,” says Ray Pittman, President and CEO of CBRE Australia and New Zealand. “As an institutional investment of interest to professional investors, agriculture really only started to emerge in a bigger way in the last five years or so. We’re starting to see an increasing interest in agricultural and agribusiness properties as an asset class now.” Part of this is the changing ownership structures in the agribusiness industry in Australia, as many more institutional owners enter what has traditionally been a broadly family-oriented market. Many of the ‘mum-and-dad’ farm businesses have become very large, and as their owners reach retirement age and their children do not have either the interest or capability to take over, only corporate and institutional groups can afford to purchase these businesses. But this is not the only reason. According to Danny Thomas, Regional Director of Agribusiness for CBRE Pacific, the reason for this change is that investors – especially foreign investors – are increasingly seeing agribusiness as an opportunity given the sector’s relatively stable returns and prospects for future growth over the long term. Most of the capital now coming into Australian agribusiness is from foreign investors who have traditionally invested in infrastructure and large commercial assets (such as airports, city buildings and large shopping

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centres). “We’re seeing higher allocations of funds being made to real estate, infrastructure, and in that same category now, agribusiness and farm production assets,” says Danny. “In addition to that, there’s also a broader global thematic about rising populations and increased affluence, particularly in our part of the world (through Asia). There’s some smart money – particularly the private equity money – trying to position itself somewhere in that supply chain, whether that’s production assets or post farm-gate in processing or logistics assets.” With the rise of the Asian middle class population and the changing food demands of that demographic, investors are seeing the growth opportunities in Australian agriculture and agribusiness thanks to the country’s proximity to Asia and excellent reputation for food safety and quality. This will lead to a more sophisticated investment environment in Australia as more international and domestic institutional capital comes into the market, as there are a number of significant landholders who are at or nearing retirement age. One example is the Kidman cattle empire – the largest private landholder in Australia with over 100,000 square kilometres – which was listed in 2015 and has recently attracted bids of nearly $400 million from both domestic and international syndicates. “I think Australia will continue to attract increasing amounts of global capital,” says Ray. “And I think we’ll see an increasing institutional ownership of that asset class, with more global investors looking to invest in agribusiness and specifically, in Australia.” But what effect will this have on the agricultural industry on the ground in Australia? While some may think increasing foreign investment spells doom and gloom for Australia’s regional communities, that will not be the

case according to Danny. “I think you’ll see more vibrant rural communities rather than less vibrant rural communities – all of these new property owners are going to need better and more highly-skilled employees, and those employees are going to want to live in strong regional towns with good schools and a sense of community,” says Danny. “Rather than some of the doomsday stuff that you hear from time to time when you hear discussion about consolidating the number of farms, I think that consolidation of land ownership will actually mean stronger, better and more vibrant communities.” Given these changes in the Australian agriculture and agribusiness real estate and investment environment, there is a growing need for real estate firms that can connect large property owners with investors (both domestic and foreign) who have the necessary capital, and vice versa. As one of the largest real estate firms in the world, CBRE is well-placed to make these connections. Because more of the investment capital is now global, groups like CBRE can connect local opportunities to global capital. They already have the deep connections with large and institutional investors (such as pension funds, sovereign funds and family offices of high net worth investors) because of the work they do in other forms of real estate, and it’s the same sources of money that are now looking to buy into the agribusiness industry in Australia. CBRE typically deals with larger sales and purchases that are out of the reach of regular buyers, usually over $10 million. Their advantage comes from pre-existing relationships in the institutional and corporate space, understanding how prospective buyers of such large properties think. Established real estate houses in the agricultural space that have offices strewn

across regional Australia are very good at operating in the smaller property market, and CBRE is not trying to compete with them. “The distinction we’re trying to make is that if you’re trying to add value for vendors and owners of property, you’re probably better off closer to the capital than closer to the property,” says Danny. “Once you get into a level of value where it’s going to appeal more to a corporate or institutional investor, dealing with the local agent is probably not what you need to be doing. You need to be dealing with an international real estate agency that can connect you to a deeper pool of capital.” An example of CBRE’s expertise and the value of the firm’s connections with large-scale investors can be seen in the recent sale of the Demeter Farming portfolio, an aggregation of ten properties in Victoria’s west totalling just over 5,000 hectares. The transaction was completed in early 2016 by CBRE for $29.1 million. CBRE targeted and approached new and existing investors in the region and pitched the Demeter opportunity directly to them. Three of these parties submitted offers – two domestic syndicates and one international agricultural fund – with one of the local syndicates making the winning bid. In this case, CBRE’s comprehensive and competitive transaction process achieved an outstanding result for the existing foreign owner (Altima Fund), with a premium of roughly 20 per cent above the previous valuation of the property. For CBRE, the appeal of the Australian agricultural sector is the role it plays in the Australian economy as a whole. But in an increasingly dynamic industry, it is important to go above and beyond to provide a level of service and expertise that competitors can’t match. “Agricultural products are a big part of the Australian economy, and therefore we want to be in that sector,” says Ray. “In this market though, we have to add more value to the transaction, we can’t just simply be a purveyor of local market information. We have to have real expertise about property operations, property financing, how to increase yields and profits and how to help investors create value and make more out of their investments.” As with the Demeter example, it is CBRE’s expertise and knowledge in the industry that provides an advantage. With a large team working for every client, they cover every aspect of each sale – from mapping and vendor reporting to database management and marketing. “Investors come to us because they know they get good information about the inherent qualities of the property, and the likely performance of the property and how to maximise its value going forward,” says Danny. “We invest an enormous amount of time to understand who the market participants are and exactly what they’re looking for, and that’s the benefit of working with CBRE.”

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04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

The science is settled. GM food is safe In recent years there has been a scare campaign against genetically modified food. A SHER JUDA H finds not only is the technology safe, it is necessary if Australia is to fulfil its agricultural potential.

he science is settled. The debate is over. Genetically modified (GM) food is safe. It is safe for animals, safe for people and safe for the environment. In fact, GM food is so risk-free that humanity and its vast food production systems have functioned for almost 20 years without one single reported health incident. Since 1996, almost 100 billion food producing animals in the US have consumed genetically modified food products. And the science shows that throughout the lives of each of these animals, no animal health agency has recorded a GM related animal health incident. The same is also true for human consumption of food products containing GM ingredients. According to the European Commission, in the past 15 years an estimated two trillion meals containing GM food products have been consumed. These meals have been eaten by hundreds of millions of people across dozens of countries all over the world. And during this time, not one health incident has been reported by a recognised human health authority. SO WHY ALL THE FUSS? If genetically modified food is safe, and if this food enjoys the same nutritional equivalency of non-GM food, why all the fuss? Why, after thousands of scientific studies confirming that GM food has no effect on human health, are people still worried? The answer is simple. The anti-science lobby has been infinitely more effective at spreading fear than the pro-science lobby has been at disseminating fact. Organised opposition to genetic modification technology is one of the biggest challenges preventing Australia’s embrace of more productive farming techniques. At present, community opposition to GM technology consists of

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environmental activists, anti-GM farmers, food advocacy organisations, dedicated organic farmers, religious organisations and those opposed to what they call “the private ownership of life”. The methods employed by these groups are both obvious and varied. But the most effective strategies have involved the deployment of emotive fear campaigns arguing any number of the following fallacies: erroneous or unsubstantiated health risks linked to eating GM foods, the release of dangerous genetically modified organisms, a reduction in natural enemies, the rise of secondary pests, the destabilisation of insect ecologies, the rise of herbicide resistant superbugs, increased herbicide and chemical use, and the loss of international consumer markets. As a result of these emotive and effective campaigns – none of them based on evidence – significant damage has been done to Australia’s once envious scientific record. Australia has grown GM cotton since 1996 and was a world leader in the science. More than 95 per cent of Australia’s cotton crop is now comprised of some form of GM cotton (Senate Estimates, May 2011, Supplementary Brief, p. 2), lifting farm income by $395 million – an average of $180 per hectare (National Press Club Address, 20 September 2012, Graham Brookes, The global economic and environmental impact of GM crops). But today, Australia is arguably about a decade behind its main international competitors, exposing farm communities and the biotechnology sector to economic risk and obsolescence. If Australia is to reverse this trend before the development gap becomes insurmountable, it will need to act boldly and quickly. WHY DOES IT MATTER? Why should we be so concerned? Aren’t Australia’s farmers successful enough to go without the need to purposefully alter nature? A fair enough question,

but the uncomfortable truth is that nothing stays the same forever. Just as computerisation and mechanisation have revolutionised the way we work, genetic modification is changing what we grow and how productively we grow it. And the evidence internationally is very clear. Since 1996, GM crop hectares have increased a hundredfold to 181.5 million hectares in 2014. The US is now the world’s largest agricultural exporter and grower of genetically modified crops, with 73.1 million hectares under cultivation. It also enjoys a near 90 per cent average adoption rate across all biotech crops (ISAAA Brief 44-2012: Global status of commercialized biotech/ GM Crops: 2012, Executive Summary, New York, 2012, Table 1) – a clear sign of community acceptance. The US is not alone: 28 other nations across both the developing and developed world embraced genetic modification technology in 2014. Brazil, Argentina, Canada, India, China and South Africa all have vast tracts of land in GM crop production. Combined, the nations within South America, Asia and Africa are now responsible for 54 per cent of global GM crops farming a total of 94.1 million hectares – more than 100 times Australia’s share. Due to the many well-documented productivity improvements, global interest in producing GM crops has exploded, with double digit growth rates ocurring for twelve years straight, according to industry body ISAAA (International Service for the Acquisition of Agri-biotech Applications). As of 2012, 81 per cent of global soybean planting, 81 per cent of global cotton planting, 35 per cent of global maize (corn) planting and 30 per cent of

global canola planting used genetically modified crops. Interest in genetically modified alfalfa, sugar beet, potato, papaya, squash, poplar, tomato and rice are also all now gaining ground. THE UNDENIABLE BENEFITS The reason for the rapid global uptake is clear. Genetic modification is one of the most important technological innovations of our lifetimes. It is also one of the most powerful. By allowing its users to modify organisms to exhibit new traits to the benefit of the modifier, genetic modification gifts its users the power to change the world. Some of the many benefits can include: n higher living standards n stronger productivity n better yields n accelerated cultivar development n increased farm incomes n lower input costs through less use of pesticides, herbicides, fertilisers and water n improved environmental outcomes. Indeed, many of these benefits are not simply forecasts, they are present day realities. According to ISAAA, GM technology has “reduced chemical pesticide use 37 per cent, increased crop yields 22 per cent, and increased farmer profits 68 per cent during the 20 year period 1995 to 2014.” At the farm level, GM technology can also bring about many significant

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productivity improvements worth a great deal to farmers. These include: n resistance to pests and diseases n different development and ripening speeds n production of larger fruits and seeds n higher nutrient levels n improved post-harvest qualities n greater absorption of light, nutrients and water n better resilience for storage and transportation n stronger tolerance for climates previously deemed too dry, high, wet, cold, frost effected, saline or nutrient deficient.

If managed correctly, the possibilities of GM could be endless. In many ways, genetic modification is the agriscience continuation of the selective breeding programs humanity began during the Neolithic revolution 10,000 years ago. But whereas in the past it would take several generations through a hit and miss approach to breed a corn stalk with bigger ears, in today’s laboratories the process can take just a few years. Put simply, genetic modification technology is revolutionary. Managed successfully, it could transform the agricultural productivity of the entire planet. But Australia is at risk of missing out on this opportunity. THE POSSIBILITIES FOR AUSTRALIA As the sixth largest nation by area in the world, Australia is home to 5.9 per cent of the world’s land. With this tremendous land endowment comes great responsibility – and great opportunity. With the benefit of genetic modification technology, Australia’s farmers could open up new areas to agriculture and lift yields in poor performing areas. They could help counteract soil salinity and help grains fix their own nitrogen, augmenting the growing cycle. They could kill pests and disease and extend produce storage life. If managed correctly, the possibilities of GM could be endless. Imagine the economic benefits of being able to grow what we want, where we want, at the most economically efficient price we can. In the hands of responsible and entrepreneurial farmers, GM could redefine the meaning of prime agricultural land and return degraded land to production. It could breathe new life into Australia’s poorer rural communities and unlock the tropical Far North and temperate south to greater investment, increase national income and economic activity. Put simply, GM technology has the potential to transform vast sections of Australia’s land mass into agriculturally productive territory. It could also ensure large parts of the Australian environment remain undisturbed, by boosting yields on existing farmland. Whether it is to expand or protect, enhance or specialise, the possibilities for our continent are limitless. WE MUST ACT NOW Australia presently faces the very real possibility of becoming uncompetitive in the world’s agriculture, aquaculture and forest product markets. As of 2012, only 700,000 hectares of Australian farm land hosts genetically modified crops, largely cotton and canola (ISAAA Brief 44-2012: op. cit., Executive Summary, Table 1). This represents less than 0.005 per cent of the total amount of

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land used for genetically modified crops worldwide. If Australia is to secure a growing share in global agricultural markets, unlock the continent’s full potential and become a leader again in genetic modification, fundamental policy reform must take place. There are several key areas where action must be taken. These are: n reducing the cost of genetic modification commercialisation n accelerating genetic modification trial approval n removing state genetic modification moratoriums n creating a stable regulatory environment n lifting segregation tolerance levels n repelling genetic modification labelling requirements n boosting community confidence in genetic modification products. If Australia can undertake these reforms, then the vision of boundless plains of opportunity could be truly realised. If not, the nation risks missing out on the next step of its economic and technological development. Since the Neolithic revolution, humanity has almost continuously laboured to improve the productivity of its agricultural activity. This process has transitioned through various stages of revolution from the ancient domestication techniques, to the first Columbian Exchange, to the British Agricultural Revolution, to the adoption of mechanisation and more recently, through the Green Revolution. Wherever one looks, humanity has nearly always strived to lift its agrarian productivity through the eager embrace of technology and improvements in operational technique. But over the past 20 years Australia has walked away from this history as a result of fear, misunderstanding and mistruths. The time has come to reaffirm our faith in science and embrace the economic and developmental opportunity which accompanies it. Australia has a great farming future ahead of it. It’s time we go back to growing it.

ABOUT THE AUTHOR: Asher Judah is a policy and media professional with over twelve years’ experience with industry associations in the property, construction, manufacturing and farm business fields. He is the author of the public policy book, The Australian Century. He has been published on a number of public policy matters including cities, planning, population growth, agriculture, China and the environment. He is also a contributing author to the public policy books, Right Social Justice: better ways to help the poor and Really Dangerous Ideas.

04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

Investing in agriculture: our future If you surveyed the Australian investment landscape of a few years ago, you would have struggled to find any options for funds supporting rural communities and industries. The Australian Agricultural Investment Fund was established in 2013 in order to address this gap. KEIRO N C OSTEL L O speaks to co-founder Daryl Young about an investment fund that is putting its money where its mouth is by backing Australian agriculture.

ounded by Daryl Young, Will Holmes à Court and Michael McHugh in 2013, the Australian Agricultural Investment Fund (AAIF) is one of the rare funds prioritising investment in Australian agriculture. Launched at a time when Australian agriculture was seen as a risky investment (indeed, it still is), AAIF has made great strides in a short time. The AAIF’s chief philosophy is to invest in projects and systems that help to build sustainable regional and rural communities. It is a philosophy born out of Daryl’s own background – he is a third generation farmer from rural Victoria – and a stark realisation that opportunities in the bush were dwindling for young farmers. “Having been involved with agriculture all my life, I see the opportunities diminishing and conditions getting tougher for younger people trying to get into agriculture,” says Daryl. “There are a lot of young people out there who have the ability and the education to be innovative on the land, but the opportunities don’t present themselves. So why did I get involved in agricultural investment? Because I think if Australian agriculture is going to have a future, we need to change the system to allow more opportunities.” Such social goals necessitate a long-term approach to investing – and while Australian investors may be hesitant to invest in their own agricultural sector, their global counterparts have been able to see the benefits of doing so. Daryl has found that overseas investors recognise and appreciate the benefits of agricultural investments. “The corporate investment model is all about return on investment (ROI), liquidity, and developing the lowest cost operation for the commodity market place,” says Daryl. “We had to have a greater vision than just ROI for what we were trying to achieve, which is a sustainable agricultural industry both in an economic and physical sense.”

For the AAIF, agricultural investing doesn’t just mean buying up farmland. While traditional agricultural investors rely on ownership of farms – requiring a significant amount of money – to deliver the best ROI, the AAIF model is different. It recognises that the capital outlay for land ownership is not necessary to achieve the best farming results. Instead, AAIF focuses on putting investments towards the farm’s business and becoming involved in production by building symbiotic relationships with farmers and producers alike. How does this work? Rather than the investment capital being spent on assets such as land and machinery, it is used to establish a joint venture or partnership where the land is leased by the investor from the farmer, who retains ownership. It’s a win-win for both parties and for the rural communities that see a much-needed injection of capital to upgrade resources and creates employment opportunities. While the AAIF currently enjoys healthy interest from Chinese investors thanks to a joint venture with state-owned enterprise giant COFCO, its longterm goal is to gain access to Australian superannuation funds that are currently being invested overseas. Daryl hopes that after a few more years of reasonable financial returns the AAIF will be included in the investment portfolio of these super funds, an arrangement that would be ideal given the AAIF’s community-centric philosophy. “I was fortunate enough to see my father start off with nothing except a mobile shearing plant, and over ten years build himself up enough to buy a property,” says Daryl. “Those opportunities don’t exist anymore. We have to change the system to make these farms and communities sustainable in the long term for our younger generation, who are currently our biggest export from rural and regional Australia.”

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04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

A brand of success Ask any top marketer, brand creation is one of the most daunting jobs in the business world. But the hardest part is finding ways to sustain the brand. This is tough enough for a single product, but how can you project and enhance the brand of an entire country’s products? The Australian Made logo gives us a perfect lesson in how it is done.

An Australian Made retail outlet in China

or the past three decades this simple green triangle with golden kangaroo – an unmissable representation of Australia – has conquered the world. It has adorned an enormous range of products, from food and fibre to complementary health and beauty products and everything else in between. The Australian Made, Australian Grown (AMAG) logo is today an instantly recognisable and widely-used stamp of approval that helps businesses promote and sell Australian products around the world. The story begins in 1986 with the establishment of the AMAG logo by the federal government. The logo changed hands in 1999 and is now administered by the Australian Made Campaign Ltd, a not-for-profit organisation supported by the Australian Chamber of Commerce and its network of state and territory chambers, and the National Farmers Federation (NFF). Now with 2600 Australian companies licenced to use the logo, over 15,000 products are in circulation both domestically and overseas bearing the distinctive green and gold kangaroo trademark. And according to CEO Ian Harrison, the logo is enjoying record levels of recognition both in Australia and in export markets, greatly benefiting the companies that use it. “Recognition and trust in the Australian Made logo is at record levels and the profile of the overall campaign is excellent,” says Harrison. “It establishes

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a very clear connection to Australia, so for companies that are not known in particular marketplaces the Australian Made logo is their strongest brand.” While the trademark is used by large companies such as Nestle, Cooper’s Brewery, The Warrnambool Cheese and Butter Factory Company and Simplot, the great majority of companies licenced to use the logo are SMEs. These smaller companies are using the logo to establish their credentials, particularly in export markets. And why is that? The Australian Made logo gives small businesses in particular a very powerful brand umbrella under which they can establish the recognition of their own brand and their own products. This is particularly true in Asia, where recognition is growing quickly as a result of the efforts of the organisation. The logo has been registered as a trademark in China, South Korea and Singapore (as well as the USA), and Australian Made branded retail outlets have been opened in China and South Korea. Asian consumers are particularly interested in Australia’s enviable reputation for food safety and quality, and the Australian Made logo taps into. “Australia’s high-standing as a clean, green environment with very high safety and health standards gives product from this country a crucial leg up in in the Asian marketplace,” says Harrison. “And the Australian Made logo establishes that connection.” One SME user of the Australian Made logo in Asia is OzKids, an exporter of infant formula into China and Hong Kong. When the brand was launched six years ago, General Manager Doug Smith described the decision to use the logo as a “no-brainer”. The company’s research told them Asian consumers knew and respected the logo. “It has great recognition in export markets, particularly in Asia,” says Smith. “The reason that a lot of Asian markets want products from Australia is they know that if it’s passed all of our regulations, then it’s got to be safe. “And dealing with infant formula, safety is paramount in the consumers mind. What they want is an assurance of safety, and that’s what they get with the Australian Made logo: it adds credentials to your product.” 2016 marks the 30 year anniversary of the Australian Made logo, 30 years of Australian businesses reaping the rewards from their association with such a strong and recognised brand. Long may it continue.

04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

Feeding the booming organic demand Australian Certified Organic is the largest certifier of organic goods in the country. Products sporting the distinctive Bud logo not only have the advantage of certification, but also the market assistance provided by its parent company, Australian Organic Ltd. With global demand for organic produce steadily rising, the considerable advantages and opportunities in gaining organic certification are invaluable.

early 30 years old, Australian Organic (formerly Biological Farmers of Australia) was established to progress the interests of farmers and processors who wanted to promote and protect the message of organic products. A subsidiary, Australian Certified Organic (ACO), was set up in 2001 to certify products according to organic standards, and its distinctive Bud logo can be found on over 80 per cent of all certified organic products sold in Australia. With direct government accreditation or certification agreements with all major trading countries (including China, Korea and Japan), the Bud logo is becoming increasingly familiar to consumers around the world. While Australian Organic is a not-for-profit organisation (and therefore does no commercial facilitation), it plays a very important role in international markets by working with foreign governments to ensure that products bearing the Bud logo meet the organic standards set by the importing country. As an example, after many years of hard work with the Korean government, ACO was the first foreign certification agency to offer organic market accreditation for any producer (Australian or otherwise) trying to access Korea. In addition to its certification and market access efforts, Australian Organic also: offers membership that allows farmers and others in the supply chain to have a say in the strategic direction of the organisation; hosts industry networking events; and commissions a biennial market report to track market growth and consumer sentiment. According to Chairman Dr Andrew Monk, Australian Organic’s most important role is ensuring that the products its subsidiary certifies meet the necessary standards, while also ensuring high levels of integrity in organic standards. “Our emphasis is on managing integrity in the supply chain so that products that are certified organic under our brand are exactly that,” says Dr Monk. “It’s probably the single biggest focus we have – to ensure that the activities, from farm level through to retail, are enhanced by legitimate worldwide market access that is recognised for its integrity.” With the consumer understanding of and demand for organic products booming around the world, organic certification provides advantages in both market access and farm gate returns. “Organic certification allows you to realise some additional value that is implicit in a lot of good Australian product and tap into the clean and green reputation of Australian produce both domestically and overseas,” says Dr Monk. “You can then claim a premium for the extra hard work put into ensuring the compliance and seek higher-value markets.”

One company that has seen the benefits of certification with ACO is Arcadian Organic and Natural Meat Company. Producing organic beef and lamb that is sold domestically and exported to nine countries, Arcadian has seen demand for organic meat outstrip their supply and is a beneficiary of the reputation of ACO’s Bud logo. “The ACO Bud logo is very well-recognised – the world knows it’s a safe product and that they can trust anything with the Bud logo on it,” says Arcadian Livestock Manager Peter Gall. “In the last two to three years there has been a big take-up of organic certification in the farming world as people have seen the sort of premiums we can achieve.” The current focus for Australian Organic is the Chinese market, as the country’s thriving middle-class develops a taste for Australian food products. Driven by the commercial interests of their clients and members, the organisation is working hard to improve market access and the flow of certified products into China. “China is the biggest sleeping giant in terms of market access and it’s only just waking up now,” says Dr Monk. “As a well-positioned country with a great reputation for high standards of integrity and good produce, we have huge opportunities to supply organic products to that market.”

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Simplotâ&#x20AC;&#x2122;s cooperative approach to competitiveness

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04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

Much has been said about the ample opportunity for Australia’s agricultural industry to play a critical and lucrative role in meeting rising Asian food demand in the coming decade and beyond. Less has been said about the Australian food processing industry participating effectively in this growth trajectory. Simplot Australia’s CEO Terry O’Brien talks with GRAEME PHILIPSON about the opportunities and challenges.

n line with most Australian manufacturing, food processing is facing a seemingly never ending escalation in costs, leading to reduced international competitiveness. Many food processing companies are relocating their plants offshore or even closing their doors for good. An exception is Simplot Australia, a diverse food business which operates nine major manufacturing sites across the country. It directly employs around 3,000 people and processes over 400,000 tonnes of Australian grown vegetables and potatoes each year. Simplot’s Edgell vegetable cannery in Bathurst was the nation’s first in 1926, and that facility along with its vegetable plant in Devonport Tasmania means it remains the only Australian processor of frozen vegetables. Simplot Australia is a wholly owned subsidiary of the US-based and family owned J.R. Simplot Company. It is home to some of Australia’s favourite food brands, such as Edgell, Leggo’s, Birds Eye, John West, LeanCuisine, I&J and Chiko. Terry O’Brien is Simplot Australia’s CEO. He believes the Australian food processing industry is in danger of losing its relevance in the global trade in processed food items. “Australia has long enjoyed low energy costs and a comparatively favourable exchange rate,” says O’Brien. “Unfortunately this has led to complacency in some quarters about the rise of other business imposts, such as high labour rates and on-costs and inefficient work and management practices. “Energy costs in Australia are now moving towards or beyond the global average, and while the exchange rate has moved back towards its historical average after a period above parity, it is still volatile and subject to the vagaries of global sentiment rather than economic fundamentals. But innovative businesses have identified niches in the market and have managed to fund the necessary investment to take advantage of the opportunities they have identified.” O’Brien says Simplot has been able to do this. “Improved yields and new technologies have meant that Simplot has been able to meet market prices despite large increases in other input costs like labour, energy, packaging and raw materials. This means a win not just for Simplot but for its customers and end consumers.” He gives as an example the rapid identification of emerging Pulsed Electric Field (PEF) technology by one of Simplot’s senior food scientists and presented at the New Food Processing Technology seminar in Europe in late 2011. The conventional method of cutting potatoes into chips using water knives causes significant fracturing and feathering of the chips, explains O’Brien. In cooler climates this means the uncooked chips need to be warmed or pre conditioned in hot water first, resulting in significant energy use. It also affects the texture of the chips.

PEF works by applying an electric field pulsed at a high frequency to the potatoes in water prior to cutting, which softens them and eliminates the need for pre-conditioning, as well as providing better cutting quality and higher yield. Simplot worked in collaboration with the developers of this technology and invested in pilot scale and factory trials prior to implementation in Australia and globally in early 2013. Since then Simplot estimates it has saved over 300 million litres of water and more than 100,000 gigajoules of energy. A SPIRIT OF INNOVATION The Simplot story began in the US state of Idaho in 1929, when 14 year old J.R. ‘Jack’ Simplot began a one-man farming operation, developing a new method of dehydrating onions and potatoes for storage. His innovations meant the company saw massive growth in World War Two supplying the US army. Today Simplot is a global food and agribusiness enterprise with major operations in the US, Canada, Mexico, Australia and China. The company’s brands have a long legacy in Australia. In 1894 Henry Leggo began selling his mother’s authentic bottled tomato based sauces to appreciative miners in the goldfields, and the iconic Chiko Roll first appeared at the Wagga Wagga agricultural show in 1951. Simplot is extremely proud of this tradition, and has blended it with the innovations that have made it one of the most successful companies in the Australian food industry. “Jack Simplot was a pioneer in what we now refer to as green thinking,” says O’Brien. “Simplot maintains his legacy of ‘bringing earth’s resources to life’ through a commitment to sustainability and the three pillars that guide its efforts: Spirit of Innovation, Passion for People, and Respect for Resources.” Simplot’s NPI (New Product Introduction) process is a unique method the company has evolved to translate its technological innovation into commercial products. Simplot currently has 110 NPI projects running simultaneously across multiple portfolios and delivering a 55 to 60 per cent success rate – practically twice the industry norm. Simplot has one of Australia’s leading technical and pilot plant facilities at its headquarters at Mentone near Melbourne. “Our culinary centre is a class leading resource which employs chefs, culinary technologists and food stylists as important members of the cross functional project teams,” explains O’Brien. “The centre has an advanced sensory testing facility where every product is optimised, assisted by over 300 registered panellists who regularly participate in this vital activity.” O’Brien says R&D and technology adoption are key contributors to the successful growth of the business. Simplot’s food scientists, engineers, technologists and subject matter experts are constantly seeking new opportunities to innovate across the technological landscape.

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Simplot also holds international patents for the application of ultrasonics to vegetables and potatoes that deliver significant benefits. Like the PEF method of cutting potatoes it is a safe, non-chemical, non-thermal process that reduces energy consumption and saves valuable resources. PASSION FOR PEOPLE “Passion for People is not just a sustainability pillar but an integral part of how Simplot operates,” says O’Brien. “Being a family owned company has many positives that combine to create a culture where each employee is valued and nurtured.” He says the safety of Simplot’s employees is paramount and is always the first topic covered at senior executive and board meetings. “Simplot is also dedicated to the communities in which it operates, and to its customers and partners. Simplot’s core values are contained within our acronym LIFE: Leadership, Integrity, Flexibility and Excellence. These values are reflected in our approach to business and are the guiding principles that influence how the company thinks and acts.” O’Brien says that over 87 per cent of Simplot’s 468 retail products rate 3.5 health stars or higher, and that Simplot Australia is committed to continuously improving the nutritional qualities of its products in line with the Australian Dietary Guidelines. It has developed a nutritional profiling system that aims to limit saturated fat, trans fat, salt and added sugar and to increase protein and fibre across existing and new product ranges. Over the past two years alone Simplot Australia has removed more than 25 tonnes of salt from community consumption through the reformulation of the Leggo’s pasta sauce range. Simplot has graduate programs across many areas of the business. Within its Quality and Innovation division it runs a ‘Mentoring the Next Generation’ program to fund scholarships at RMIT University and Monash University in Melbourne, and to sponsor PhD candidates at the University of NSW, University of Queensland and at Massey University in New Zealand. Across the broader community Simplot Australia is a strong contributor to philanthropy and volunteerism. In 2013 Simplot provided over 350,000 kg of food and groceries to Foodbank and assisted in the preparation of nearly half

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a million meals for people in need. Simplot has donated 62,000 kg of ingredients to Second Bite, a not-forprofit organisation that rescues and redistributes good surplus food to over 1,000 community agencies across Australia. This passion for people extends internationally to suppliers, with Simplot’s membership of SEDEX (Supplier Ethical Data Exchange) highlighting its commitment to ethical sourcing and labour practices, particularly in emerging economies. RESPECT FOR RESOURCES “Respect for Resources highlights our efforts to run our business in a way that is environmentally, socially and economically sustainable for the long term,” says O’Brien. “Simplot has set goals across every area of its business for reduction of water and energy consumption, for more environmental packaging and for carbon emissions.” In Australia its membership of the REDcycle recycling project has diverted over 2 tonnes of Birds Eye plastic packaging from landfill to be converted to high quality outdoor exercise equipment and park benches for children’s playgrounds. In 2008 Simplot set itself an ambitious ‘25-in-10’ target for a 25 per cent reduction in energy use per tonne of product across its factories globally. Its Birds Eye factory at Kelso near Bathurst has already achieved that milestone. Simplot Australia is a leading supplier of frozen and shelf stable seafood to the Australian market through its John West, Birds Eye and I&J brands. Its multi-faceted ‘Responsibly Sourced Seafood’ commitment includes partnering with the World Wildlife Fund, and pledges to source 100 per cent sustainably caught tuna by the end of 2015. Through its partnership with WWF it has funded important projects for community fishing programs and WWF conservation projects in the Solomon Islands and Papua New Guinea. FULFILLING AUSTRALIA’S POTENTIAL O’Brien believes Australian food processors need to be agile and flexible operations where the success of the business is the priority, in the knowledge that

employee benefits will flow from that success. “For the Australian agricultural industry to fulfil its potential a reciprocal relationship with food processors is vital. The reverse is also true – the relationship is vital for the prosperity of food processing businesses and their employees. “Australia is hampered by a lack of scale in most of the things we do in the food chain, all the way from farms being too small to overcome the overhead load, to the packaging suppliers whose economic run sizes are compromised by shrinking orders, right through to the processors who struggle to amortise the cost of new technology over low volumes and often seasonal restrictions. “It is therefore imperative that Australian food processors have access to both a stable and strong domestic trade and a steady and growing export sector,” says O’Brien. “We know that Australians are innovative and creative in many areas of business. To unlock that talent in the food processing sector we need an improvement in the volume and profitability necessary for investment in R&D.” Simplot is harnessing its Australian experience as part of the company’s transnational strategy to engage more fully in Asia. “The initial phase involves utilising the company’s core capabilities and assets in Australia – its investment in people, infrastructure and culture – to replicate this successful model in other countries.” O’Brien says Simplot’s corporate strategy includes extending its reach further into Southeast Asia. It is actively looking for partners, customers and culturally aligned suppliers within the region. Simplot’s values are aligned with those of this fast growing market, offering many opportunities.

“Insight into what consumers really want is critical to this search for connection with both domestic and global markets. Investment in the science of market forces must replace instinct and anecdotal drivers. Where crops are involved, growers and processors should work together to find higher yielding, lower input crops which can improve the economics of the final product.” He believes companies like Simplot need to identify products consumers want and in which Australia has advantage, either through uncommon inputs or quality standards that are valued internationally. “Consumers, in Australia and in Asia, are becoming more interested in the source of the food they are eating, and in the quality and safety standards applied to the manufacturing of that food and the treatment of animals and people involved in the supply chain. “As Asia, especially China, begins to acknowledge the need to regulate their food safety, employee safety and environmental protection, they are learning that regulation doesn’t come cheap. Costs are climbing in Asian food production just as demand is accelerating. This puts Australia well in the game. “Australia needs to collaboratively work towards increasing productivity and efficiency and reigning in the cost of production to elevate the industry to competitiveness once again.” Simplot Australia is playing its part in ensuring Australia retains a competitive and dynamic food processing industry.

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04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

Ruralco: linking consumers to the best Australia has to offer With over 45 companies in the Ruralco group providing agribusiness services and expertise across the whole spectrum of farming enterprise, Ruralco’s businesses are household names in Australian agriculture. And with two of these groups – Frontier and Ruralco Property – Ruralco is also expanding its reach into Asia.

Frontier International’s new state-of-the-art live export ship, The Greyman Express

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ormed in 2013, Frontier is the live export arm of the Ruralco portfolio, exporting livestock to China, Indonesia, Vietnam, and Cambodia. Drawing on alliances with the best livestock breeders in the country, Frontier provides a fully integrated service covering the whole supply chain from sourcing of livestock to shipping and logistics. The big challenge for Frontier is meeting the demand of the booming Asian middle class. By 2030, two thirds of the world’s middle class population (including 1.5 billion people in China and India alone) will live in Asia – and demand for Australian meat has never been higher. A level of demand this high is obviously pushing up prices across the country – in early 2014, the Eastern Young Cattle Indicator (the benchmark for Australian cattle prices) was 395 cents per kilo. In January 2016 it hit 600 cents per kilo for the first time and in August 2016 reached new heights at over 700 cents. And according to Frontier Managing Director Will McEwin, this is just reward for the effort of Australian farmers. “We’re seeing unprecedented values for Australian cattle, and they’re very well justified: Australia has the best livestock product – especially in cattle – in the world,” says McEwin. “Most demand indicators are at their peak or close to a record high – whether it be domestic or international markets for boxed beef or for live cattle.” Well positioned to service the demands of this growing middle class, Frontier rises above its competitors by focusing on technical expertise. According to McEwin, this expertise is a response to the challenge of complying with strict standards of animal welfare, quarantine and traceability.

“We’re seeing unprecedented values for Australian cattle, and they’re very well justified” “We assist the customer to make the most of the livestock they purchase from us, and make sure that our expectations – as well as community and government expectations – around animal welfare standards are exceeded,” says McEwin. “This reinforces the world’s acknowledgement of Australia’s value as a supply source, but also a supply source of quality.” Frontier adheres to traceability by tracking every movement of every single animal in its care. This tracking is done through several pieces of technology including Radio Frequency Identification (RFID) ear tags, photographic scanners and GPS technology. Every movement an animal makes – from feedlot to port to foreign abattoir – is scanned and recorded, ensuring that Frontier is capable of supplying the entire movement history of each and every animal. Leaving no stone unturned in the quest to provide the best possible service to international customers is a quality that is shared by another arm of the Ruralco group – Ruralco Property. A provider of rural and regional real estate and property services across Australia, Ruralco Property has an annual turnover exceeding $1 billion, and has 300 staff in over 100 outlets covering every state and territory in the country. Despite operating across the entire expanse of Australia, it’s local knowledge that sets Ruralco Property apart. The depth of knowledge within the company makes Ruralco Property perfectly suited to facilitate connections between buyers – both domestic and international – and Australian sellers. Carefully chosen staff all over Australia living and working in rural areas gives the company an unmatched local knowledge when it comes to selling property. This local knowledge not only gives Ruralco Property a well-known and trusted presence amongst those looking to sell in rural areas, but also gives pro-

Company Website

Esmerelda Station in the lower gulf region of Queensland

spective buyers comfort in knowing they’re dealing with experts in local regions. For international buyers, these community ties are a huge plus. “With Ruralco Property, buyers get access to staff whose local knowledge is a massive asset,” says Northern Australia Real Estate Manager Andrew Adcock. “Our local service backed by the strength of the Ruralco group provides clients with the certainty they require during the buying and selling process.” There is no better example of the Ruralco advantage in local knowledge and expertise than the recent sale of ‘Esmeralda Station’, a 406,000 hectare cattle breeding property in the lower gulf region of Queensland. Including almost 30,000 high grade Brahman cattle, a property with a herd of that size is a rare sight on the Australian market. As such, the property generated strong interest from overseas investors looking for a sizeable piece of the Australian beef industry. Esmeralda Station had been listed for sale a few times dating back to 2008, but the opportunity to market it was first offered to Ruralco Property – represented by Troy Trevor and Peter MacPherson of the Queensland Rural office – in early 2015. According to Troy, his office’s pre-existing relationship with the owners was the reason they opted to employ the services of Ruralco Property. “The owners had tried other agencies in the past to market it, they’d been there and done that,” says Trevor. “But we’ve been handling their livestock business for the past ten years, so they gave us the opportunity to market the property. They picked Ruralco Property because of their relationship and connection with us.” Due to go to auction in March 2015, the sale of Esmeralda Station was postponed due to seasonal conditions and offered for private sale. Thanks to the hard work of Troy and Peter, a deal was reached with Gunn Agri (trading as Cunningham Cattle Company) and the sale was made. While the price for the transaction was not released, the property was listed for private sale at $40,000,000 on a walk-in walk-out basis. One of the biggest sales of the agents’ careers, the sale of Esmeralda Station would not have been possible without their local knowledge and community ties – the hallmark of the Ruralco Property organisation. Ruralco displays leadership in both the Australian live export and property industries by leveraging technical expertise, uncovering innovative methods and anticipating the needs of overseas markets. This kind of leadership has a beneficial impact on the entire domestic industry, raising the bar for quality and service, as well as raising the profile of Australian excellence. The examples of Frontier and Ruralco Property ensure that the Ruralco name continues to stand for the best in agriculture and agribusiness.

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04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

Doing things differently: the Handpicked way Handpicked Wines is not your average wine label. Using a unique business model, this recognisable brand doesn’t just offer wine from a single vineyard or region – it provides the best wines from regions across Australia and the world. KEIRO N CO ST ELLO talks to the team creating a world of wine under one label.

n 2003 William Dong took over Handpicked Wines as Managing Director and began to craft a very new type of wine label. His mission was to provide not just quality wine but a variety of wine that could not be matched by any other label, reflecting the best that each winemaking region around the world can produce. From these beginnings, Handpicked Wines is now a major player not only in the Australian domestic market but also in Asia.

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William started by restructuring the company and the brand to reflect his vision of connecting customers with the best wines from the best winemaking regions. He had the prescience to realise success in both the domestic and overseas markets wasn’t just about quality of wine, but also the story behind the wine. “I realised the quality of wine we had was good, but not good enough and we didn’t have a good story to tell to the public,” says William. “There are a lot of wineries that produce wine from just one region, but we can produce wine from any region around the world. That’s our story.” Backing up his global strategy, William also saw the need to establish vineyards and wineries in Australia to solidify the Handpicked brand. In 2013, he brought renowned wine consultant Gary Baldwin into the company as Chief Winemaker to oversee both the vineyards in Australia (in the Mornington Pennisula, Yarra Valley and Barossa Valley) and those overseas. With their business model well-established and Gary’s 40 years of winemaking expertise on board, the quality of the Handpicked wine has increased and the brand has grown dramatically in the last few years. Under Gary’s careful eye, the Handpicked model involves carefully selecting grapes and wineries from not only premium Australian winegrowing regions such as the Barossa and Margaret River, but also from Italy, France, Chile, Spain and New Zealand. This enables Handpicked to offer its customers the best wines from the best winemaking regions around the world. As just one example, the Handpicked team is currently discussing the expansion of their wine selection to include a sangiovese, an Italian red wine. Thus, Gary has been scouring Tuscany to establish partnerships with the highest quality winemakers in the region. “With sangiovese we’ve found there’s a demand – it’s a wine that has a

certain character reflecting the Tuscan region that the public recognise and enjoy, but often find either difficult or expensive to get,” says Gary. “We’re trying to cut out at least one section of the market by sourcing it directly, and then going to market without all sorts of people in the middle.” Ensuring quality across different varieties builds trust in the Handpicked label – customers begin to see the brand as an assurance of quality. They know that the wine could come from Italy, Spain, Chile or New Zealand, but because it is under the Handpicked label, they’re going to enjoy it. And Gary and his team go to great lengths to ensure this quality – so vital to the Handpicked brand – is maintained. Each winemaker partnered with Handpicked is given a specific plan that outlines every facet of the winemaking process, including the style to be achieved, how the wine should be made, the type of oak it should be stored in and how long the whole process should take. Frequent checks from Gary and his team ensure that their directions are being followed. “A huge amount of my time and the company’s time is spent going into the vineyards, looking at the grapes, making sure we’re buying the best fruit we can get, and taking the time and the trouble to weed out anything that we don’t require,” says Gary. “We do all this because we want to make that wine absolutely crackerjack, the best we can.” One of Handpicked’s biggest strengths in staying ahead of the market and their competitors is their versatility. Their globe-trotting business model allows them to easily adapt to upcoming wine trends, and this is where Gary’s 40-year history as a wine consultant and judge comes in handy. With his depth of knowledge and attention to detail, Gary is able to confidently predict the changing trends in wine consumption around the world and act on them. In China, for example, he predicts the popularity of ‘big reds’ such as Australian shiraz and cabernet will soon face stiff competition from more complex varieties. “In Australia and New Zealand, definitely the wines of the moment are pinot noir, and the next step is going to be wines that are a little bit more subtle or complex – such as sangiovese – and not as big and obvious as shiraz,” says Gary. “My prediction is that the rest of the world is going to go this way, and there will soon be a serious need for high quality pinot noir in China.” Acting on this prediction, Handpicked have secured partnerships with Australian vineyards in regions that produce high quality pinot noir, such as the Mornington Peninsula in Victoria. Much like the sangiovese example in Tus-

cany, it is Handpicked’s ability to guarantee the best quality across different varieties that builds trust and recognition in the brand. As the company has found out, this is particularly true in Asia. The involvement of Handpicked Wines in Asia, goes back to 2004 and William’s realisation that there was a significant and growing appreciation of fine wine in China. “When I started in the wine industry, the only thing that I knew was that I loved wine,” says William. “And because I was born in China and developed my love of wine while being educated overseas, I realised there were a lot of people in a similar situation to me. I realised that China was a market for us.” Handpicked Wines went into China earlier than many Australian wine labels and, despite a tough first entry, soon found success by focusing on a single city at a time. In 2005 – just one year after distribution into China began – Handpicked Wines were the most popular wine brand in the city of Shenzen. Now, they distribute wine to all major Asian markets and have offices in nine locations across China. For William, his own experiences reflected the rising Chinese appreciation of fine wine and Handpicked Wines was able to capitalise on this. “I’m from a background where we are very into food, and we like to eat different kinds of food all the time. With Handpicked, we want to provide the same thing to our customers,” he says. “They don’t want to drink just shiraz every day, and they don’t want to drink just shiraz from the Barossa – they want choice.” It’s a philosophy that underpins the whole Handpicked enterprise – not just in Asia, but in Australia and every other wine market as well. “You can walk into a bottle shop and there are so many wines from so many different regions and producers that the consumers can get lost – there’s an overload of choice,” says William. “We want to build a brand that can provide

Highbow Hill Vineyard, Yarra Glen, Yarra Valley

variety, but with a guarantee of quality. If you want to drink Barossa shiraz, we have that. If you want to try shiraz from another region, or another wine altogether, you can do that under the Handpicked label and you can be sure that it’s going to be good.”

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From the Barossa Valley with love Over the course of four decades, Maggie Beer has covered just about every facet of the food industry and is one of Australia’s best-known authorities on food. Her entrepreneurial verve has seen her successfully manage first a farm, then a restaurant and now a gourmet food manufacturing business that is successfully exporting to China.

aggie Beer’s affinity with the renowned Barossa Valley region began in 1973. Sydney born and bred, Maggie spent some time travelling the world before returning to Australia to settle down in South Australia’s most famous wine region with her husband, Colin Beer. Here they began breeding pheasants and cultivating grapes, eventually establishing a small shop to sell the game birds. “When we first started breeding pheasants we could sell them just for novelty value but no one knew how to cook them,” says Maggie. “Cooking came naturally to me so that’s what I started to do – cook our pheasants and quails, pickle quail eggs, make pate and utilise every bit of the birds.” The humble shop grew into the famed Pheasant Farm restaurant; an audacious move considering Maggie had no formal experience or training as a chef, nor had she ever worked in a restaurant. The restaurant soon became hugely popular, not only in the Barossa Valley but nationwide, both for Maggie’s personality and her signature Pheasant Farm Pate. In 1991, the restaurant won the Remy Martin Cognac/Australian Gourmet

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Traveller Restaurant of the Year award and Maggie and Colin were suddenly confronted with a waiting list for every meal and helicopters flying in dining guests from far-flung locations. “Ironically, the success of the restaurant led to its closure,” says Maggie. “Although they were exciting times, such a workload was just too much to maintain week after week.” Maggie and Colin decided to sell the restaurant and instead focus on creating packaged gourmet food under the name Maggie Beer Products, making the products from seasonal ingredients drawn from their fertile surrounds in the Barossa Valley. The first product they made was Maggie’s Pheasant Farm Pate, capitalising on its immense popularity in her restaurant. The success of the product led to the establishment of a commercial kitchen, allowing the brand to extend their range and add new gourmet food items such as fruit pastes, jams and sauces. The company has grown exponentially in the last 20 years, going from just a handful of employees to now being one of the Barossa Valley’s biggest employers with more than 100 staff across two sites. As the company grew, so has its product range – there are now over 60 individual items under the Maggie Beer Products brand (for more information see page 301). Having tasted success across Australia, the company has recently begun exporting products to China including Verjuice and fruit paste, as well as ice cream which is available in Metro, City and Ole’ supermarkets. In less than a year the products have gained recognition in key Chinese markets, and Maggie puts this down to having formed the right partnership on the ground in China. “Finding the right partner is the most important aspect to this puzzle for me; over the years there have been many opportunities for partnerships but it’s all about finding someone who I can trust,” she says. “Our fruit paste and Verjuice is served in top restaurants across Shanghai, which we are extremely proud of.” In addition to her successful range of gourmet food products, Maggie has also written a string of best-selling cookbooks and hosted her own television series. It is her deep love for her food products, combined with her hardworking nature and endless drive to improve, that has made her gourmet foods so popular. “My food philosophy will always remain: to cook from the heart, making the most of each and every ingredient I have at hand,” says Maggie. “My aim is to make the very best products available to everyone, regardless of their cooking skills or the time restrictions of a busy lifestyle.”

04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

Close ties with local town makes for good business In rural Australia, agribusinesses and the towns in which they are based have something of a symbiotic relationship. Nowhere is this truer than in Central West New South Wales, where the town of Cowra is the home of Breakout River Meats. The fate of both the company and the town became linked ten years ago when the Cowra abattoir went into liquidation, and the relationship has prospered ever since.

traddling the Lachlan River in the Central West region of NSW, Cowra is a small town of roughly 10,000 people about four hours’ drive from Sydney. Predominantly a rural community, the town and the surrounding region are heavily reliant on an agricultural industry which employs 15 per cent of the local workforce. A large chunk of this agricultural workforce is employed by Breakout River Meats, the second largest employer in the region behind the Cowra Council. The company was started by lifelong Cowra resident Chris Cummins in 2006, producing high quality beef, lamb and pork products that are sold around Australia through butchers and independent supermarkets (see pages 298299 for more information). “Breakout River is a very important part of the economic fabric of Cowra,” says Chris. “We’re responsible for tipping about $13 million a year into Cowra’s economy.” The relationship between Breakout River and the town of Cowra and its surrounds is born out of necessity – the town provides the workforce and geographical conditions that makes Breakout River successful, while Breakout River provides employment and a boost to the local economy. With a good climate and a steady water supply from the Lachlan River, the region is known for good grazing and farming country. When Chris was

starting Breakout River, he needed to look no further than his backyard for the perfect place to source his livestock. “Cowra is in the middle of a great area for sourcing product, which is what we do,” says Chris. “We’re really blessed with where our processing plant is situated, because we’re not too far from Sydney and in the middle of really good farming country.” While Breakout River has always sourced its livestock from Cowra and its surrounds, it didn’t always process the meat in the area. In the early days of the business, the processing was done at the abattoir in the town of Young, about an hour’s drive south of Cowra. However, this was an arrangement that wouldn’t last long. “We had no control over our product – we were sending quality livestock to Young and they were ruining it,” says Chris. “Their processing was terrible, their logistics were terrible. Here we were trying to build a business from a top end product, and it wasn’t going very well.” Around the same time in 2006, the Cowra abattoir went into liquidation and Chris began pursuing the facilities in order to re-open the abattoir and shift the processing side of his business away from Young. After several months dealing with liquidators, his hard work paid off. “An announcement was made two days before Christmas 2006 that we had purchased the plant at Cowra, and the whole town seemed to celebrate the fact that it would re-open and over a hundred people would get their jobs back,” says Chris. “We started processing there in March 2007, and today the plant employs about 185 people.” And while Cowra struggles with the same issues every regional Australian town does – including migration to the cities, difficulty attracting young people to the area and drought – the town is surviving and even prospering slightly. Since 2006, the Gross Regional Product (GRP) of the Cowra region has risen by nearly three per cent. For Chris, it was a business decision to gain total control over his product – without total control he couldn’t guarantee the quality of meat his customers were receiving. But as a lifelong Cowra resident, he is only too happy for Breakout River to play such a vital role in the health and prosperity of the area in which he lives.

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Sweeping plains and science combine to make AACo’s superior beef The Australian Agricultural Company (AACo) is the oldest continuously operating company in Australia, though it is certainly no dowager resting on its laurels, waiting on its inheritance.

n the contrary, today’s AACo is a dynamic brand-led beef producer and marketer, operating properties covering almost one per cent of Australia’s land mass – a massive seven million hectares of land in Queensland and the Northern Territory. Across this vast territory AACo operates a strategic and integrated balance of properties, feedlots and farms that produce some of the country’s finest grass-fed, grain-fed and Wagyu beef. “We’re a company that has been around for the best part of two centuries,” says Jason Strong, CEO of AACo. “And we have a great story to tell the world.” From its early days in the 1820s in New South Wales when sheep and Shorthorn cattle were the favoured production animals, AACo has passed through several re-configurations as a pastoral and coal mining concern and even building and operating railways in the early 1900s. The move north and into beef specialisation began in the early years of the twentieth century, when AACo purchased the Corona and Headingly properties in Queensland and later acquired a number of Northern Territory properties, including Brunette Downs, while simultaneously disposing of its NSW properties. BEEF IS NOT JUST BEEF The centrepiece of AACo’s plan for the future is its ‘Art of Australian Beef’ brand strategy, which comprises brands that define the provenance and

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unique attributes of each of the company’s beef products. Together these brands communicate the AACo narrative; each one strengthening and deepening the premium beef story. Each of AACo’s specifically bred beef varieties and each beef cut is a vital piece of the strategic jigsaw matching the development of elite cattle with the wants and needs of each particular market. It is aimed not just at meeting customers’ wishes but delighting them with a superior culinary experience. Across the more than 20 countries to which AACo’s beef products are delivered, the demand from discerning chefs and consumers continues to grow. The company estimates its beef products are consumed by more than one million people every day. Like so many of its agricultural peers in Australia, AACo has one eye firmly fixed on its Asia growth strategy. The logic is compelling and it bears repeating: on the nation’s doorstep lies the fastest growing region in the world. “The industrial and urban revolution currently underway across Asia is creating the largest middle class in the history of the world,” says Strong. By 2030 it is estimated that the well-off Asian middle class will have swelled to at least three billion people, all of them seeking to live and eat well. And if past evidence of human development is anything to go by, their demand for protein-rich diets is only going to increase.

FREE RANGE GRAZING ON SWEEPING PLAINS AACo’s home is the “land of sweeping plains” so poignantly captured in Dorothea McKellar’s poetic anthem to Australia. Free range grazing on the wide open spaces of Australia’s northern pastoral lands is a defining element of AACo’s premium beef production. In a world crying out for clean and natural products, what could be more natural than cattle grazing across vast, grassy plains? It is a vision of a unique and pristine environment that resonates around the world. Combining this distinctive natural environment with the latest technology and science in cattle production holds the key to the continuing success of AACo. Behind the product and the global marketing that tells the world about AACo’s quality brands, there lies years of research and development that commenced in the 1990s and has been evolving ever since, gaining momentum in recent times as the science of genetics makes rapid advances. “Technology and innovation are integral to building a competitive and sustainable agricultural business today,” says Strong. “AACo has a dedicated innovation and technology team with a range of projects across production, feed lotting, processing and our routes to market. “Our investment in innovation and technology, combined with our scale, gives us a massive amount of information and tools to manage and monitor the performance of our animals. From analytics to genetics to cash flow, you need to stay on top of a lot to stay on top of the market.” LEADING IN COMPOSITE CATTLE BREEDING AACo has led the way in composite cattle breeding in the beef sector, selecting and combining the most productive traits from a variety of breeds to produce their own genetically superior breeds of cattle. These breeds are renowned for their fertility, growth and ability to thrive in a variety of climates. They demonstrate strong feedlot performance, excellent carcass characteristics and overall profitability. Breeding performance is supported through the application of cutting edge technology in genetics and genomics, utilising a range of industry-leading programs and equipment to monitor the herd and increase productivity,

meat quality and animal traceability from paddock to plate. None of this could be achieved without exceptional cattle bloodlines, rigorous production processes, highly-trained feeding masters and strictly-enforced quality control measures. “We aim to set the benchmark against which all other beef products are measured,” says Strong. “That’s why we have been working hard to ensure AACo has the capability and the capacity to deliver quality. Our aim for all our brands is to be the best of the best regardless of the category they target – from quick service restaurants to steakhouses to fine dining restaurants across the world.” Premium Wagyu beef is an excellent example. It may come as a surprise to learn that AACo runs the largest Wagyu beef herd in the world. The specialist Wagyu stud herd, Westholme, acquired by AACo in 2006, brings with it some of the most elite genetics ever to leave Japan. And the top cuts of AACo-branded beef based on these Wagyu genetics are delivered across the globe under the signature ‘Wylarah’ and ‘Westholme’ brands. In 2014 AACo commissioned a state-of-the-art processing facility in the Livingstone Valley just outside Darwin, with the capacity to process up to 1000 head of cattle a day when running two production shifts. The facility is a central plank in AACo’s strategy toward vertical integration and supply chain control. It provides a valuable route to market for AACo and other beef producers in Northern Australia. Livingstone Beef uses state of the art technology to produce export beef, hides and rendered products. “We’re absolutely committed to developing strength in our supply chains to ensure that we have an efficient, sustainable business that produces the highest-quality beef, delivered to our customers and consumers around the world,” says Strong. ATTENTION TO ANIMAL WELFARE The care of production animals has become a major community issue in recent years, drawing attention to the way in which they are treated from birth to processing. AACo is rigorous in ensuring its animal welfare policies and procedures meet the highest standards, acknowledging that its licence to operate is dependent on these expectations being met. “AACo is absolutely committed to environmental sustainability, to efficient production, and to ensuring that at every stage, our animals are managed to meet not just welfare standards, but standards which we ourselves are proud and happy to stand behind,” says Strong. “What we really know is that the happiest and healthiest animals produce the highest-quality beef, and this is really what we’re committed to in our investments and in the way that we manage and control the performance of our animals.” All animal welfare practices are audited as part of quality management, which includes Cattle Care on the company’s stations and National Feedlot Accreditation at its feedlots. AACo has embraced the implementation of the Australian industry’s Exporter Supply Chain Assurance system to ensure best practice along the live export supply chain. “In addition to industry requirements and consumer expectations, AACo has developed our own systems and training to ensure that all of our staff have the highest level of awareness, training and skill to ensure that all of our animals are the happiest and healthiest they can possibly be,” says Strong. “It is the combination of these unique features of AACo – the fully integrated business model, the best genetics, the pristine pastures and the advanced animal husbandry and care that we call ‘The art of Australian beef’.”

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PFD – an Australian family feeding Australian families The vastness of Australia’s continent has long presented challenges in the logistics of feeding its often far-flung population. This is especially true of fresh food, and one Australian company has been tackling this challenge since 1943. In over 70 years, PFD Food Services has grown from a humble Melbourne fish merchant to become one of the most recognisable names in food distribution and logistics.

ccording to Chief Executive Officer Kerry Smith, the company’s customer focus has driven its innovation and development. Since 1988, the business has been 100 per cent family-owned and operated and throughout its years of prolific growth it has maintained its focus on its customers in the foodservice industry across the country. “Our business is driven on innovation and providing solutions,” says Kerry. “Therefore we strive to offer new products and services to assist our customers in making their own businesses a success.” That focus on the success and growth of their customers has helped shaped PFD’s own success. “Fortunately, with the input of many family members who have diverse knowledge and experience and are active in the business, we have maintained and will maintain our family-owned focus,” she says. From its beginnings as a fresh fish merchant at Melbourne’s wholesale fish markets, PFD has grown massively. What started out as J Hill & Son became Processed Fish Distributors in 1943 when restrictive government pricing control policies led the company’s directors to explore other options. Processed Fish Distributors then became Processed Food Distributors

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when it expanded to include more processed food items in its supply after the war, such as frozen peas, pies and ice cream. Responding to consumer demand, dry goods were the next step in PFD’s expansion. Since then, strategic purchases have seen PFD’s presence move into all corners of the country – from Tasmania to Cairns, from Perth to Darwin, the company is moving food across our wide brown land. Primarily delivering fresh and frozen food products to foodservice businesses across the country, the company has invested continuously in its fleet, facilities and infrastructure. PFD now manages more than 70 distribution centres across Australia, and with a fleet of more than 650 vehicles it’s clear the company is a literal driving force behind food products sold in restaurants, hotels, schools, aged care facilities, jails and events across the country. Maintaining the logistics to accommodate such a fast-moving machine isn’t without its challenges. Running a large fleet of trucks across such a huge country means the company has to be on its toes when it comes to vehicle and road safety. According to Kerry, infrastructure planning is a constant on the company’s agenda, including building vehicles that are cutting edge in terms of safety and reliability. “Planning for today and the future plays an integral part in our ability to supply and service our customers at the highest of standards,” says Kerry. “As we upgrade to new facilities and re-invest in our infrastructure, we aim to maintain leading practices and gain efficiencies in operations and running costs.” The safety of its drivers and the community, the easing of pressure on major city road networks and continued improvement of regional roads will ensure the prompt delivery of products and a flow-on effect of customer satisfaction from consumers. In addition, the company’s focus on innovative technology has been a natural part of its growth. PFD’s web presence (through which customers can place orders and manage accounts), development of tablet applications and utilisation of RF scanners for stock management have all increased the company’s ability to provide quality technological services. “Technology is a significant game changer in our industry,” explains Kerry. “We ensure our technical staff have access to innovation both here and overseas – we always seek to understand that ever changing landscape.” PFD’s commitment to meeting market needs and ensuring customer satisfaction with cutting edge technology has set it apart for over 70 years – and looks set to do so for many more to come.

Company Website

04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

Pace Farm: an

Australian family story Pace Farm’s history began in 1978 with one farm in western Sydney managing just over 20,000 hens. Driven by excellence and the desire to be the best at what they do, Pace Farm gradually developed into an entirely self-sufficient company that successfully manages every single step from farm to store.

ounded by Frank Pace, Pace Farm is now one of Australia’s leading producers of egg and egg products. The company manages multiple farming sites, producing fresh eggs as well as an extensive range of high-quality fresh, frozen and dried egg products. “I’m committed to providing my customers with the freshest, tastiest and most enjoyable eggs. That’s why we manage everything ourselves – from rearing day-old chicks to delivering to retailers via our own delivery fleet,” says founder Frank Pace. “We’ve invested heavily in the latest technology and farming methods to protect and maintain the food safety and quality of all our products.” Pace Farm’s expansive operations encompass the rearing of pullets, farming four egg production styles (free range, barn laid, caged and organic – see page 212 for more information), grading and packing of eggs, an egg processing plant, sales and marketing, transport and delivery through their fleet of trucks. Utilising the most advanced technology and management systems throughout all their facilities, Pace Farm is recognised for their consistent quality and freshness across Australia and Southeast Asia. Their cutting edge facilities exceed international standards in product quality, biosecurity, flock care and environmental impact. In 2006, Pace Farm constructed a state of the art rearing, laying and grading facility, which was the first of its kind in the country to focus strongly on its impact on the environment. The Wattle ridge facility excels in food safety, animal husbandry and welfare and has received numerous accolades for its positive environmental impact, including the NSW Excellence Award for Environmental Design & Planning. “Innovation has enabled Pace Farm to adapt to the changing needs of customers and government legislation alike,” says CEO Paul Pace. “Wattle ridge was developed to make the most cost-effective and safe product that would also meet the highest of all environmental standards.” Nothing goes to waste at the facility, with chicken manure used as valuable compost and a specially designed water treatment plant installed to process recycled water. Enhancing its contribution to the environment, Wattle ridge features a substantial tree-planting program with over 14,000 trees planted. A champion of producing eggs humanely, Pace Farm was a pioneer in the barn laid system of egg production and introduced their line of Liberty barn laid eggs in the mid-1990s which are produced from cage-free hens.

Pace Farm also produces free range eggs, where hens have access to roam outdoors for up to eight hours per day. Each one of Pace Farm’s farming sites is regularly and independently audited to ensure they are compliant with strict national and international quality schemes, including HACCP, the NSW Government’s salmonella monitoring accreditation scheme and the Egg Corp Assured quality assurance program. Throughout its successes, Pace Farm has remained a private, familyowned business with over three generations of the Pace family involved with the everyday management of the company, from farming right through to truck driving. “Our ultimate goal is to be a world class agri-business with sales spanning Australasia, and to meet and exceed customer expectations for quality, service and value,” says Paul. Accredited to export, Pace Farm eggs and egg products have won many prestigious awards, including the Woolworths Supplier of the Year for 2012, Coles Supplier of the Year for 2013 and the McDonalds Supply Chain Australia New Zealand Journey for Good Award in 2015. Through their commitment, passion, investment in innovation and facilities that exceed international standards, Pace Farm has set itself apart as the leading producer of quality fresh eggs. With control over quality and food safety at every stage of the supply chain, this family-owned company continues to deliver the enjoyable egg to families in Australasia.

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04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

Industry expertise the key to recruiting in ag Agricultural Appointments is a recruiting agency that operates nationally and has specialised in placements for agricultural, agribusiness and food and wine companies since 1979. The fact the company focuses solely on the agricultural industry means it has the expertise and range of quality contacts within agriculture that are the envy of generic recruiters.

Al Kellaway (left) and Rick Maybury at the AWN

s opposed to generic recruiting companies that operate across a number of industries, Agricultural Appointments excels through its specialisation. The company’s advantage over other recruiters operating in the agricultural sphere is that it knows the industry inside-out – the roles available, the candidates and the companies. This knowledge is built through a combination of industry networking and hard work. Agricultural Appointments staff attend all relevant university career days and exhibit at key conferences such as the National Horticultural Convention. Agricultural Appointments also has an unorthodox approach to recruiting its own staff that reinforces its industry knowledge – the company tends to hire people with an agriculture background. “Our rationale is that we want people who understand the industry more than recruiting specialists,” says Dr Ray Johnson, Managing Director of Agricultural Appointments. “We have a very good back office structure with state of the art online recruiting software, so the more important thing is to have people who understand the industry and can communicate and form relationships with key clients.” One of their most successful recruiters is Executive Search and Selection Specialist Al Kellaway, who has a farming background and worked in sales for agricultural chemical companies before joining Agricultural Appointments over nine years ago. Late last year, Al was approached by Australian Wool Network (AWN), a pri-

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vately-owned wool marketing company, who needed to recruit a Chief Operating Officer (COO) for their expanding business. Al had previously recruited for AWN in the past, and this held him in good stead when the company was looking to fill such a major position. “Their business was growing and they were open to exploring the market for talented leaders with experience across other rural sectors,” says Al. “I was required to search out and evaluate the suitability of some of the industry’s best managers to lead the AWN growth into the future.” Apart from Al’s valuable knowledge of the industry, the attention to detail in his recruitment process contributes to him successfully finding the perfect fit – for both employer and employee. “Because I’d gone out and met with the AWN and their staff, and I had a thorough understanding of their needs and their culture, I knew which candidates would best fit into that culture,” he says. After just a three-month turnaround, Al was able to place Rick Maybury in the COO position at the AWN. Rick had previously been the Executive General Manager of a major rural distribution company and approached Al looking for a position with the opportunity for growth. After several rounds of interviews, Rick was named as the AWN’s new COO in February of this year, and couldn’t have been more impressed by his experience with Agricultural Appointments. “I’d dealt with plenty of recruiters in my former life, on the hiring side, and dealt with a few when I was looking for a role,” says Rick. “By far and away, Al was light years ahead of everyone else – he returned calls, kept me informed throughout the entire process and it actually renewed my interest in using recruiters as an employer.” The AWN’s experience is just one of the many successful recruitment assignments Agricultural Appointments has undertaken. Their focus on specialisation and industry insight reinforces their position as the leading recruitment agency in the Australian agricultural industry. “Increasingly we are finding our services in demand throughout Southeast Asia, and particularly where major Asian agribusinesses are investing in Australian agriculture,” says Ray. “There is an acute skills shortage in Australia and only a dedicated specialist executive search and recruiting company such as Agricultural Appointments has the depth of networks and knowledge to find the right people.”

04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

Taking farm produce from paddock to port In 2014, Lindsay Australia expanded their existing transport and rural services business by launching Lindsay Fresh Logistics, which operates out of the Brisbane Markets. The business offers producers complete control of the cold chain process – with unloading, cross-docking, storage, ripening, fumigation and import/export services – under one roof, ensuring farm produce reaches the port in the best possible condition.

t is Lindsay’s complete control of the cold chain – from paddock to port – that sets them apart from competitors. In just over two years, the Lindsay Fresh Logistics business has expanded its export reach to the Middle East, Asia and New Zealand, and also imports from all over the world. The company’s purpose-built facility in the Brisbane Markets is the hub for all this activity, utilising state-of-the-art technology to provide the best possible service. One example of this is the fumigation chamber, which uses Nordico gas recapture technology to safely remove fumigants from gassing rooms rather than release them into the atmosphere and harm the environment. “Rather than releasing these harmful gases into the atmosphere, our technology collects and recycles the gas in canisters lined with charcoal and coconut fibre, eventually rendering it inert for deep burial,” says Bob McMillan, General Manager of Lindsay Fresh Logistics. Continuing the hi-tech initiatives in the facility, Lindsay’s cold storage technology allow for the rapid cooling of farm produce. After fumigation, the produce is fan-cooled and only takes three to four hours to reach the appropriate temperature, as opposed to the eight or more hours offered by many other fumigation facilities that cool via natural means.

Since it was pioneered by Lindsay Fresh Logistics, this technology has now become the standard for quarantine facilities across the country. It has proved so effective that the Queensland Department of Agriculture and Fisheries uses Lindsay’s facility to train its staff in quarantine and fumigation processes for food and farm produce. For growers and producers around Queensland, it is not only the advanced technology but the ease of doing all their supply chain business under one banner that makes the services of Lindsay Fresh Logistics so attractive. Utilising the Lindsay Rural and Lindsay Transport arms of the business, food and produce can be grown, packed and taken straight from the farm and delivered to the Brisbane Markets facility for unloading, storage, fumigation and quarantine processing. From there, Lindsay Fresh Logistics manages all logistical and export requirements to ensure that farmers only need to deal with one company – rather than several different companies handling a different facet of the detailed cold chain process – from paddock to port. “We cover every process in the cold chain, which makes things really easy for the farmer,” says McMillan. “It’s all handled under one roof.” Combined with the state-ofthe-art technology the business uses, it is easy to see why Queensland’s farmers are attracted by Lindsay Fresh Logistics single solution for the supply chain. With considerable success despite being in operation for less than three years, it may not be long before we see Lindsay offering similar services at other major ports around Australia.

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04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

Qantas Freight drives Australia’s food exports Through its freight business, Qantas provides the capacity for Australian food exports – both fresh and chilled – to reach international shores in a timely and safe manner. And as demand for Australian produce rapidly increases in Asian (and particularly Chinese) markets, this service has never been more vital. As the only airline to offer direct freighter capacity between Australia and China, Qantas is playing an undeniably crucial role in the growth of the Australian export market.

antas Freight has been flying fresh produce between Australia and China for more than 30 years, and boasts 13 years of continuous freighter operations to the country. Eighteen flights each week depart Sydney bound for the Chinese ports of Beijing, Chongqing and Shanghai, 14 of which are passenger flights with the capacity to carry freight, while four are dedicated freight services capable of carrying loads of up to 110 tonnes. In the 2016-17 financial year, Qantas transported almost 1,500 tonnes of perishables to China across both freighter and passenger flights, with a huge array of food and farm products being uplifted. Products typically range from chilled meat and seafood to fresh

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fruit and vegetables, as well as powdered and fresh milk. The last few years have seen significant growth in the trade of goods between the two countries, and demand continues to grow. The China-Australia Free Trade Agreement (ChAFTA) – which started in December 2015 – has played a large part in facilitating this growth by eliminating the tariffs on 95 per cent of Australian exports to China, including most agricultural products. In addition, the rise of eCommerce – and in particular the interest of Chinese consumers in Australian products given our reputation for food safety and quality – has also played a role in the increased trade between the two countries. The increase in demand means that more than 50 per cent of Qantas Group’s international

capacity is now servicing Asia – a statistic that is exceeded when it comes to freight. “Qantas currently offers the only direct freighter capacity between Australia and China, forming a vital link in the supply and transport of goods and perishables between the two countries,” says Nick McGlynn, Chief Operating Officer of Qantas Freight. “Twothirds of our 1,750 international services offering cargo capacity per week currently operate to and from Asia, and with the free trade agreement between Australia and China, this sector will no doubt see even more growth.” Qantas is also seeing significant growth in chartered freight flights to China, including those chartered specifically for the transport of fresh produce and perishables. The airline operates up to a dozen chartered freight services a year to ports within China such as Taiyuan, Qingdao and Guiyang, carrying everything from farm equipment and machinery, to fresh seafood and even alpacas. The growth of traffic in air-freighted goods between Australia and China is definitely a boon for Australian farmers, and Qantas is meeting that demand through a combination of innovation, experience and a commitment to providing best-in-class service. Part of this commitment includes providing online tracking, which allows customers to track their freight to a precise location. To ensure food products reach their destination in the best possible condition for market, all Qantas aircraft have temperature controls to meet individual requests, while a number of Qantas’ terminals and ground handling agents offer specialised facilities such as cool

rooms, freezers, warm rooms and dry and wet icing. Impressively, Qantas’ International Melbourne Freight Terminal also features Australia’s only international, airside, temperature-controlled staging and perishables area. A fully automated facility, the terminal can protect shipments from extreme temperatures in a purpose-built, temperature-controlled zone, and offers a 24-hour operation and fully mechanised import breakdown facilities. As has come to be expected of Australia’s flagship carrier, Qantas ensures its cargo is transported to the highest standards of safety as outlined by relevant regulatory bodies. And while the list of regulations might seem exhausting to some, adherence to such high standards is part of Qantas’ strength. In addition to working with governing bodies both in Australia and Asia, Qantas collaborates with industry leaders to continually innovate its operations and help shape industry-best practice. After all, this expertise and innovation is vital to ensuring produce from Australian farms and agribusinesses reaches markets around the world and solidifies Australia’s reputation for delicious, healthy, and safe food products. “At its core, air travel is all about connecting, and that’s exactly what we do at Qantas – not just connecting people with different places, but also transporting perishables like milk, chilled meat, fruit or vegetables to those who need them,” says Mr McGlynn. “What we’re moving matters to farmers and producers, it matters to consumers and it certainly matters to us. We’re very proud to play such a central role in connecting and championing the best of Australia to the world.”

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04/THE BUSINESS OF AUSTRALIAN AGRICULTURE

Australian-made oil for Australian conditions Celebrating its 20th anniversary this year, Atlantic Oil is an Australian-owned company that supplies engine oils and lubricant to a wide range of industries, from transport and agriculture to mining and earthmoving. Atlantic is quick to respond to the constantly changing oil demands and manufactures all of its products locally in a state-of-the-art, purpose-built facility. The company sells directly to customers to keep prices competitive and stays relevant to rural Australia with a range of sponsorship and charitable activities.

tlantic Oil produces more than 20 lubricating oils suitable for use in the agribusiness industry, as well as a range of non-lubricant products such as engine coolants, brake fluids, degreasers and transmission fluids. Fulfilling the oil needs for all types of machinery, Atlantic has clients across the spectrum of farming and agribusiness enterprises that use a range of oils for everything from headers and tractors to highway vehicles and mulchers. Atlantic’s local manufacturing and development arm gives it an advantage over larger multinational suppliers such as Mobil and Shell, as it allows the company to adapt its oils to the harsh conditions experienced in Australian industries. To handle the Australian

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climate, engine oils need to have heavier viscosities – Atlantic is able to develop these oils and ensure they still adhere to the latest requirements of international machinery manufacturers such as John Deere and New Holland. Another advantage over international competitors is Atlantic’s ability to utilise its extensive R&D capability and tailor oil products for specific customers if needed. “A lot of Australians across all industries are operating machinery in dusty conditions and extreme heat,” says Steve Kalamvokis, Managing Director of Atlantic Oil. “Unlike our competitors, we make oils for Australian conditions, not European or North American standards – they experience much colder climates and therefore have different oil requirements.”

LATEST PRODUCTS MEET MARKET DEMANDS Atlantic’s newest oil product is the ProGlide Extreme 15W-40 CK-4, which has been in development for six months and was released late in 2017. The oil meets the latest standards and specifications for diesel engines, even for brand new 2017 models of machinery that haven’t hit Australian shores yet. The ProGlide Extreme 15W-40 CK-4 has an extended drain time, meaning the engine will be able to run in the field for a longer period without the need for servicing. It will be the highest specification diesel engine lubricant available in Australia, designed to perform with reliability under the most difficult conditions. In addition, Atlantic has produced a new type of tractor transmission fluid guaranteed to meet the most stringent requirements of modern farm equipment. Specifically made for the agribusiness industry, Farmtrans Plus is suitable for machinery manufactured anywhere in the world, it is one of the most technologically advanced oils on the market. FarmTrans Plus provides farmers with superior gear performance, chatter suppression, hydraulic pump operation and low temperature performance. TACKLING ENVIRONMENTAL RESPONSIBILITY WITH INNOVATION Atlantic has a culture of in-house and external testing, conducting field tests as well as 1,000-hour tests under laboratory conditions. The company ensures its products undergo external assessment, but also has an in-house chemist on hand to assist with research, product development and fine-tuning. In an industry that is constantly raising the bar in terms of standards and requirements, in-depth research and development is needed to stay competitive. New oils need to surpass their predecessors in terms of drain time, cleanliness and environmental friendliness. “We use our chemist for product development, in consultation

with the major supply companies around the world who provide us with the latest technology and the cutting-edge information that we need,” says Steve. “The standards are getting higher and higher every year – you have to continually innovate to reach the required level of performance and at the same time meet emission standards.” Atlantic takes its environmental responsibility seriously, particularly in a self-regulating industry that has a major impact on issues of environmental health and wellbeing. Atlantic recycles its oil drums, uses ethanol-friendly lubricants and even produces biodegradable oils that have a reduced environmental impact. The biodegradability of oil products is important, particularly when it comes to machines that may leak or drip oil onto the ground or into waterways. Atlantic makes oils with biodegradables fluids that are harmless and non-carcinogenic, meaning any accidental spillage or leakage onto the ground or into river systems won’t cause damage. “We work towards making healthier products for the environment that at the same time are healthy for your engines and machinery,” says Steve. “The type of products we’re making now have less emissions, release less carbon in the atmosphere and create fewer pollutants, including our general engine and hydraulic oils.” CONNECTING WITH RURAL COMMUNITIES Atlantic Oil sponsors a long list of events, clubs and individuals in rural sport, particularly motor racing. Perhaps the biggest name the company sponsors is legendary wood-chopping world champion David Foster, who is a long-term Atlantic Oils ambassador. Foster was part of the Atlantic team at the Henty Machinery Field Days to give wood-chopping demonstrations and address mental health issues among rural men. For Atlantic, such sponsorships are not just about building brand awareness, but also about staying connected with rural and farming communities. It is why the company spreads its sponsorship and charitable activities across a number of smaller clubs, benefits and causes rather than committing the majority of its funds to a larger name, such as a V8 Supercars driver. In keeping with its commitment to farmers, Atlantic also has door-to-door salesmen – a rarity in the Australian agricultural industry – and exhibits regularly at field days and events such as Henty. “We have a natural affinity for the guys and girls on the land, and would rather support more causes and help more people than have our name emblazoned on the side of a car,” says Steve. “We think it’s a better fit for the company and a better way to spread the love.”

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Focus on Australiaâ&#x20AC;&#x2122;s States and Regions Australia is a vast country. Unique contributions to the agriculture and agribusiness industry arise and develop from every corner of the land.

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05/FOCUS ON AUSTRALIAâ&#x20AC;&#x2122;S STATES AND REGIONS

The role of the states in innovation Former Victorian Premier JOHN BRU MB Y takes a look at the role of the government - both federal and state - in fostering innovation.

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here are a number of measures governments can and should take to support, grow and secure ongoing viability of regional communities. Basic services must be adequately funded and well maintained. Moving headquarters of government services to regional areas will stimulate local economies. Reliable and well-targeted infrastructure is also vital to regional communities and industries. But it’s also important to recognise that without a strong push toward innovation in regional and agricultural industries, none of these measures will be anything more than temporary. Regional Australia is no stranger to the need for innovation. Agricultural life has never been easy. Early settlers were forced to innovate as they adapted agricultural techniques brought from the old country to a new land. Farmers still face traditional threats such as drought and disease, and as climate change continues these are likely to get worse, not better. As Australia’s resources boom tapers off, many commentators, politicians and business leaders are aware of the need to tackle a lag in productivity growth masked to some extent by the growth in resources investment. Innovation is required right across the board, and agriculture and agribusiness are no exceptions. There are new challenges to be faced, as well as new opportunities. The rise of Asia, for example, means the Australian agricultural sector must act quickly to seize the opportunities presented by a growing middle class. The World Bank predicts the global middle class will expand from 1.8 billion in 2009 to 5 billion in 2030. Rising wealth brings increased demand for protein-rich food, wine and other agricultural products. The China-Australia Free Trade Agreement (ChAFTA) creates a wealth of new opportunities. Tariffs will be progressively eliminated on beef, many dairy

Regional Australia is no stranger to the need for innovation. products, wine and many horticultural products. Australia’s agricultural, forestry and fisheries exports to China are already worth $8 billion; we can expect this to grow considerably if Australian exporters are nimble enough to take advantage of a changing world. But to meet the challenges and seize the opportunities of the 21st century, we must find new ways to increase crop yields, combat diseases, mitigate the effects of drought and develop new crop varieties to meet changing and growing demand. That means we need innovation. And improved quantity and quality is not enough; innovation is also needed to add value to agricultural products. Improved packaging, greater freshness and shelf life, lower environmental impact – today’s markets demand progress across the board. There is a prevailing myth that innovation is the role of business, and the best thing governments can do is get out of the way. This is not right. There’s no question that the private sector can and should be a powerhouse of new ideas, experimentation and early adaptation of new technologies. But the fiscal, tax, regulatory and infrastructural environment in which innovation can occur is largely determined by governments. The UK think tank Demos has pointed out that Silicon Valley, long seen as a triumph of the private sector, was the recipient of a great deal of government support in the early days (much of it through Stanford University), and that the algorithm that powers Google to this day was developed on a US National Science Foundation grant. These are just two small examples of a larger truth: if government ‘got out of the way’ innovation would grind to a halt. While avoiding ‘picking winners’, governments can apply targeted interventions to encourage research and its

application to old tasks and new challenges. Commercialisation is another area in which governments can play a role, and the current federal government is just now beginning to discuss what might be done to improve the commercialisation of Australia’s medical and other research. In Australia, state governments also have an important role to play in encouraging innovation in general, and innovation in agriculture and agribusiness in particular. Our government in Victoria took a particular, place-based approach to the regions, which involved looking at the needs and opportunities identified by local communities, and recognising that government has a role in stimulating growth. We restored services and invested heavily in infrastructure through the Regional Infrastructure Development Fund (RIDF), encouraged industrial giants such as IBM to move to regional centres like Ballarat, and led the way by decentralising government services such as Vicroads, State Trustees and the Transport Accident Commission (TAC). This ‘regionalist’ approach was subsequently adopted by the federal government. But we also knew that a sustainable future for the regions meant bringing cutting edge research and technology to bear on traditional industries. Perhaps the best example of this is AgrioBio at Latrobe University. Our government entered into a $288 million public private partnership to build AgriBio, which is dedicated to finding new ways to increase productivity, fight disease and reduce the environmental impact of agricultural activity through biotechnology. Biotechnology is the use of biological substances or processes for human purposes and scientists around the world are using it to tackle some of the biggest challenges we face, such as cancer and heart disease. The application of biotechnological breakthroughs to agriculture is no less important: the prediction that by 2050 the world’s population will reach 9 billion means food production will need to increase by 70 per cent. There is a finite amount of land – we have no choice but to make that land more productive. Scientists associated with AgriBio have recently been involved in working out how certain environmental changes can interact with a plant’s genetic structure (known as ‘epigenetic change’) to help farmers maintain crop yields without the use of expensive fertiliser. This is important work, which could have important commercial implications down the line, but it cannot be done by the private sector alone. Government must invest in the facilities and scientific infrastructure to make it happen. Though the payoff may not be immediate, it will come in time. US President Barack Obama put it well when he was pressured to cut science spending at the height of the Global Financial Crisis. This would, he said, be “like lightening an overloaded airplane by removing its engine. It may make you feel like you’re flying high at first, but it won’t take long before you feel the impact.” To their credit, both Prime Minister Malcolm Turnbull and Leader of the Opposition Bill Shorten have acknowledged the value of becoming an innovative nation, and begun to lay out plans by which we can reach this goal. It’s therefore an exciting time in Australia. Both government and opposition are engaged in a conversation about the kind of nation we want to be post-mining boom. But we must remember state governments also have an important role to play, including in the areas of agriculture and agribusiness. That means continuing investment in biotech and other agricultural research. It means fostering research partnerships in Asia, with whom we share so many challenges and opportunities, and where there are increasingly important markets. And it means creating strong communities in the regions, to attract and retain the people who will drive the future of our regional industries.

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05/FOCUS ON AUSTRALIA’S STATES AND REGIONS

South Australia and Shandong: a model relationship The state of South Australia and the Chinese province of Shandong celebrated the 30th year of their sister-state relationship in 2016. Thanks to the significant effort of governments in both countries, it is a model relationship that provides a template for other states and provinces to follow.

handong is the third-wealthiest province in China, with a $US1 trillion economy and a population of roughly 100 million. It is home to some of the most recognisable Chinese brands, including electronics manufacturer Hisense, appliance maker Haier and the Tsingtao Beer label. The sister-state relationship between South Australia and Shandong began in 1986, but it is only since 2012 that the relationship truly flourished economically. In 2012 the South Australian state government created a China engagement strategy, and its existing relationship with Shandong was seen as a great platform via which South Australia could expand its relationship with the country. As a result, China is now South Australia’s most significant export partner with an export value of $2.2 billion in 2015. “There’s been a lot of new life and impetus breathed into the relationship

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in the last four years, the leaders of Shandong and South Australia have always talked about it as a win-win,” says Martin Hamilton-Smith, South Australian Minister for Investment and Trade. “We’re not just trying to sell or promote ourselves – we’re trying to build up meaningful, trusted relationships that hopefully enrich the lives of our citizens, both here and over in Shandong.” In 2015, the leaders of both South Australia and Shandong signed the Friendly Cooperation and Action Plan, a document that will guide the partnership for a three-year term and includes specific targets for the number of imports and exports between the state and province. Taking the relationship a step further, South Australia’s capital Adelaide and Shandong’s port city of Qingdao (the third-largest city in the province) recently became sister cities. Given South Australia is a relatively small state with a population of just 1.6 million, China is a massive partner to engage with – hence the focus on just one particular province. To this end, the South Australian government has established an office in Jinan – the capital city of Shandong province – in order to better facilitate trade and diplomatic relations. “The idea from both sides is that we position our respective state and province as a doorway into the wider countries,” says Minister Hamilton-Smith. “We say to Shandong, ‘come down and make South Australia your entry point into the Australian market’, and vice versa.” One important undertaking of the relationship between Shandong and South Australia is the yearly trade missions that occur in both directions. In April 2016, the South Australian trade mission to Shandong took a total of 305 South Australian business leaders to five cities in Shandong. The event saw the signing of 30 Memoranda of Understanding (MOU), with the completion of 13 exports deals valued at more than $3.5 million and another $50 million worth of leads to be followed up. The reciprocal trade mission later in the year saw 220 Shandong businesspeople do site visits across South Australia, participate in a trade exhibition and get up close to South Australia’s agricultural expertise at the Royal Adelaide Show. A total of 16 South Australian companies have found new markets into China through the Shandong relationship. And while 16 may not sound like a lot, in a small state like South Australia that number represents roughly one per cent of all its exporting companies – a fair rise when you consider that these companies started exporting to China in the last 18 months.

One company which signed an MOU in the 2015 trade mission to Shandong is I Age Media, a producer of Chinese-language news and information on a variety of platforms for both the Chinese community in South Australia and Australian businesses looking to attract a market in China. Chinese-born, Adelaide-based businessman Wayne Chao is the Managing Director of I Age Media, and he says the MOU he signed with major Shandong media outfit Bandao Broadcasting Media Corporation has allowed his company to gain a foothold in China. “As a media company, we are looking for more cooperation between Australia and China that will allow us to reach more people in China,” says Wayne. “The MOU is a platform for us, where we can bring all the information about South Australia to Shandong, and bring all the information about Qingdao to Adelaide as well.” Wayne is also the co-founder and President of the South Australia Shandong Cooperation and Development Association, which was started off the back of the 2015 trade mission to Shandong. His role is to liaise with members of the association, as well as the governments of South Australia and Shandong, to facilitate more meaningful and beneficial platforms for businesses in the two countries/cities. The association also publishes a magazine called Welcome to South Australia – a comprehensive introduction to life in South Australia (and Australia in general) that is printed in Chinese and distributed both in Shandong and to the Chinese-speaking community of Adelaide. “We use the association to promote and create more understanding of South Australia for the Shandong people and to attract more investment, tourism and international students to Adelaide,” says Wayne. “For South Australia, Shandong is the key that allows China to get to know us. We have huge potential to attract more investors from China and make Adelaide a well-known tourism and education destination.” It’s not just trade and businesses that benefit from the relationship between

South Australia and Shandong. The respective governments also recently initiated an exchange program known as Shandong Connect, where a number of South Australian public servants spend two weeks working alongside their counterparts in the Shandong public sector, and vice versa. Similar exchanges also happen in cultural, educational and scientific institutions between the two states: Adelaide recently accommodated 13 scientists from the Shandong Academy of Sciences, and every year 20 county mayors from Shandong visit South Australia to do a two-week program of lectures and tutorials with government officials. Another sign of the burgeoning health of the relationship was seen in December 2016, when China Southern Airlines began operating direct flights between Adelaide and Guangzhou with easy connections into the Shandong cities of Jinan or Qingdao. South Australia received 36,000 Chinese tourists in 2016, and the government expects not only a large surge in inbound tourist numbers on the back of this new arrangement, but also a greater increase in fresh produce freighted outbound. “The relationship is driven by the highest level of government – Premier Weatherill invests significant personal time in this, and he really leads from the front,” says Minister Hamilton-Smith. “We have processes that ensure that the government – across the board – is thinking about how it can breathe life into its engagement with Shandong and how it can contribute to Shandong’s development.” The relationship between South Australia and Shandong not only benefits businesses and governments, it also builds trade and tourism numbers between the two areas and is the platform for a deeper exchange of ideas and information both culturally and diplomatically. It is truly a win-win for all involved, and a model sister-state relationship that sets the bar very high for states and provinces around the world.

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05/FOCUS ON AUSTRALIA’S STATES AND REGIONS

South Australia: The six-star food and wine state South Australia has a long history of excellence in food and wine dating back over 150 years, and a reputation for unimpeachable food safety. The industry is the backbone of the state’s economy and is only growing as consumers from all over the world clamour for South Australia’s premium products.

advance agricultural knowledge and promote the development of natural resources. The state’s multicultural heritage – from the German settlers of the Barossa Valley in the 1850’s, to post-war Mediterranean migrants and newer Asian arrivals in recent decades – has helped to build a rich culture of food and wine, and an industry that continues to have a huge influence on South Australian society. The food and wine sector is South Australia’s largest industry – it employed one in five working South Australians and generated $18.2 billion in revenue in 2014-15. The state is globally recognised for its cutting-edge biosecurity standards and high-quality fresh produce, sourced from a pristine environment that is free of pests and diseases. South Australian food and wine products are exported to over 100 countries and backed by world-leading research and development programs.

hen the Colony of South Australia was settled in 1836, it did not take long for its fledgling community to realise the importance of the agricultural sector. Just three years later in 1839, the Royal Agricultural and Horticulture Society of South Australia was established to

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A CLEAN AND GREEN REPUTATION South Australia’s enviable reputation for food safety and quality products provides the state with a significant advantage in global markets. It has also created something of an impression that South Australia – and in particular the Barossa Valley, located just an hour’s drive outside the state capital of Adelaide – is a culinary destination of the highest standing. But what are the conditions that have enabled the development of such a reputation? The state has a diverse landscape and a Mediterranean climate that is perfect for the growth and cultivation of premium products such as olives, wine and almonds – not to mention a vast range of premium meat, grains

and fruit. The clean and green environment extends to the waters in the Great Australian Bight off the coast of South Australia, where a vast ocean stretches uninterrupted to Antarctica. A lack of major rivers and coastal settlements in the state ensures that the pristine waters produce the highest-quality rock lobsters, tuna, abalone, oysters and prawns. South Australian rock lobster and tuna are among the world’s most sought-after seafood, and the state’s grains are used in high-quality beers, pasta and oils around the world. To provide just a couple of examples, South Australian durum wheat is sold to Italy for pasta production, and its grains are used to produce the renowned Laucke flour products as well as in the manufacturing of Coopers Brewery beers. Culinary icon Maggie Beer found fame and global renown through a restaurant in the Barossa Valley that has since morphed into a line of gourmet food products. According to Maggie, the area’s superior produce is one of the key reasons for the success of her company. “We notice that by using local produce, in season, our food products stand out for the superior flavour they have and everyone appreciates tasting that difference.” Maggie – who has played no small role in the growth of South Australia as a gastronomic destination – believes that despite its diversity, the state’s food culture has flourished due to a sense of community among the industry. “We are so lucky to have access to the growers we do here in South Australia, and particularly in the Barossa. I don’t think it’s something that can be contrived – a strong food culture develops organically over time,” says Maggie. “South Australia has such a rich diversity of produce that it has naturally

allowed and encouraged an ever-growing tapestry of food-based ventures, all of them steeped in a common history.” Chief winemaker Peter Gago, from the internationally recognised Penfolds winery, echoes Maggie Beer’s sentiments about the role of community in building South Australia’s stellar international food and wine reputation. “South Australia has it all – the climate, the soils, the people. With Adelaide at its epicentre, this food and wine treasure-chest confidently sits alongside Bordeaux, the Napa Valley, Burgundy, Rioja and Florence,” says Peter. “The clean and green conditions, ancient soils and dynamic mindsets all have merit, but there’s much more to it. It’s just a great place to live, and this demeanour and spirit transmits to the quality of all things food and wine.” A pioneer of the seafood industry in South Australia, Hagen Stehr knows the value of the state’s reputation when it comes to seafood. According to him, Australian aquatic conditions are the envy of even big fishing nations such as Germany and Norway, and the South Australian seafood industry is the biggest beneficiary of this. “The tyranny of distance was a handicap for the Australian food industry in the early days, but it has become an advantage. We are so far away from everyone that the ‘Made in South Australia’ sticker or Australian Made logo really gives you quite a step up the ladder,” says Hagen. “You’re living at the end of the world, but it’s a blessing in disguise – we are the cleanest state in the nation. “For years we have been working on a clean and green image, and unlike other areas of the world – such as France, where you have wineries next to atomic reactors – South Australia is totally different,” says Hagen. “We pride

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received a number of accolades over its 172-year history. It was named White Winemaker of the Year at the 2015 International Wine Challenge and recently announced as the world’s most admired wine brand by the Drinks International magazine annual poll. For Penfold’s Peter Gago, innovation is the key to maintaining both his winery’s and the state of South Australia’s world-class reputation. “Put simply, after 172 years Penfolds primary objective is to continue to create better wine,” he says. “Innovation, diversity and a willingness to push global boundaries all keep the Penfolds team hungry and motivated.”

ourselves on our clean and green image, whether it’s for aquaculture, food or wine.” WORLD-RENOWNED WINES The jewel in South Australia’s crown is its world-renowned wine industry, which accounts for half of all the bottled wine and 80 per cent of the premium wine in Australia. The industry generated roughly $1.8 billion in revenue in 2014-15, with exports valued at $1.2 billion. One of the fastest growing export markets for South Australian wine is China and Hong Kong, where demand recently saw the market increase by $65 million. The German settlers of the Barossa Valley kicked off the industry in the 1850’s, and it soon spread to other areas which have since become familiar names to wine drinkers around the world – McLaren Vale, Coonawarra and Clare Valley. These areas have some of the oldest vines in the world, thanks to the state’s rigorous biosecurity measures that have prevented the spread of diseases like phylloxera which have decimated vines in many older wine regions. There are now 18 wine regions in South Australia and more than 200 cellar doors within an hour’s drive of Adelaide. Such is the state’s reputation for fine wine that Adelaide has recently been invited to join the Great Wine Capitals Global Network, joining eight of the major wine producing regions in the world (including Bordeaux in France, Napa Valley in the United States and Rioja in Spain). At any given point in time, there are nearly a billion bottles of wine on tables and in cellars around the world that proudly bear ‘South Australia’ on their label. The state’s reputation for prestigious wines has been reflected by a constant stream of national and international awards. Barossa Valley winery Wolf Blass was named the 2013 International Winemaker of the Year at the International Wine and Spirit Competition in London, and the Penfolds winery has also

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MAINTAINING THE PRESTIGE While it may seem like South Australia is naturally blessed by climate and isolation to the point where biosecurity management isn’t a big effort, this is definitely not the case. The South Australian government recognises the importance of biosecurity in maintaining the state’s clean and green reputation, and by extension its presence in international trade. South Australia is the only state in Australia that is free of the fruit fly, and each year the state government spends about $5 million to keep this pest and others out of the state. It is also the only mainland state in the country where the commercial cultivation of genetically modified crops is prohibited. “These programs give South Australian food and wine producers unrestricted access to new and existing export markets that pay premium prices for the assurances of our clean environment and high levels of food production safety,” says South Australian Minister for Agriculture, Food and Fisheries, Leon Bignell. “One of our key opportunities is our proximity to emerging markets in South East Asia, which we will continue to work with to secure export deals.” The government has made the provision of premium food and wine one of its key economic priorities, and is working hard in areas beyond biosecurity management to ensure South Australian produce reaches as many people

as possible. The focus is on capitalising on opportunities to increase market share and maximising the production of value-added food and wine products. Since 2013, Primary Industries and Regions South Australia (PIRSA) has supported more than 100 trade missions – both inbound and outbound – that have been of great value to the food and beverage industries of the state. One of the most recent trade missions was a delegation of 52 representatives of the wine industry, led by Minister Bignell, which went to China in 2016. According to Minister Bignell, the value gained out of these types of missions is exemplified by the collaborative attitude displayed by the delegation. “It is interesting to be on these delegations and see how much people learn from each other, as well as learn about the whole China experience and that market,” says Minister Bignell. “I have to say that it is a great collaborative approach, where you see one winery telling people to beware of the pitfalls that they themselves may have suffered a year or two earlier. “A lot of this success has come off the back of the government collaborating with the wine industry to make sure that we are working in a concerted and quite deliberate way to get South Australian wine into bottle shops and onto restaurant wine lists right around the world.” Crucial to supporting the food and wine industry is the government’s role in fostering innovation and technological advancement through investment in research and development. One of the best examples of this is the Waite Research Precinct in Adelaide, which is home to the South Australian Research and Development Institute (SARDI) – a division of PIRSA. SARDI is the state government’s principal research institute, and has provided South Australia’s food and wine industry with innovative, world-leading research for more than 20 years. The institute is a great advantage to the state, as it has the largest concentration of expertise in the Southern Hemisphere in the areas of plant biotechnology, cereal breeding, sustainable agriculture, wine and horticulture and land management.

And it’s not just SARDI that provides research and expertise for the agricultural industry in the state. Adelaide is also home to the Australian Wine Research Institute and the Northern Adelaide Food Park, which provides opportunities for colocation of food and beverage manufacturers and processors. For these businesses, colocation gives them access to infrastructure and common services on one site, which improves processing efficiencies and distribution capabilities. The state government also recently established the South Australian Food Innovation Centre to maximise future opportunities for the food and beverage industry by supporting innovation and encouraging the commercialisation of new ideas and products. The aim of the Centre is to assist food and beverage businesses find the innovation solutions they need to develop and deliver high value products that are sought after by local, national and international markets. THE SIX-STAR STATE A combination of a blessed landscape and climate, centuries of hard work and a willingness to innovate have put South Australia on the map as a real player in the global food and wine scene. With pioneers like Hagen Stehr, culinary icons like Maggie Beer and committed innovators like Peter Gago, it is easy to see why the food and wine industry in South Australia has flourished. The state’s focus on premium food and wine products is backed up by a reputation for purity and cleanliness that is well-deserved. Maintaining this reputation into the future is the next great challenge for South Australia, but it is one that is being met with aplomb by both the state government and the industry. Significant investment in biosecurity and research and development will only ensure that South Australia consolidates its position as the six-star state for food and wine for years to come.

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05/FOCUS ON AUSTRALIA’S STATES AND REGIONS

Ag sector brimming with investment opportunities South Australia’s clean and green reputation, six-star food and wine products and burgeoning links to China make the state’s agriculture and agribusiness sector ideally placed for growth. The establishment of Investment Attraction South Australia (IASA) has facilitated this growth, identifying key investment opportunities and developing an impressive track record in just its first 12 months.

he state of South Australia provides an ideal investment environment for international food and beverage companies seeking global expansion. The sector has a turnover of $18.2 billion annually, and an extensive infrastructure network encompassing rail, road, air and sea delivers South Australian food and wine directly to more than 100 countries. “The state’s advantages of a clean, green environment, intellectual capital and innovation continue to feed demand for our high quality and differentiated food from Asia and other global markets,” says Martin Hamilton-Smith, South Australian Minister for Investment and Trade. “As one of the world’s most sustainable food and wine growing environments, South Australian produce has become globally renowned for its safety, quality and product integrity.” Food safety standards in the state are impeccable and underpinned by state-of-the-art biosecurity measures, ensuring delivery of some of the highest-quality food and wine products in the world. With a highly-skilled

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workforce, competitive labour costs and excellent standard of living, South Australia is challenging the cities of Australia’s eastern seaboard in attracting international investment in the food and beverage industry. In fact, Adelaide was ranked the most cost-competitive city in Australia, passing ahead of Melbourne in global auditor KPMG’s 2016 Competitive Alternatives Report. It is also the cheapest of Australia’s five largest cities (Sydney, Melbourne, Brisbane and Perth being the other four) when it comes to total occupancy costs of office space. At $US404 per square metre per annum, Adelaide is less than half the price of Sydney and a full $US135 cheaper than the next-lowest city, Melbourne. Of course, when it comes to investment in agriculture and agribusiness, South Australia is best known in foreign markets as a premium wine producer. And with the state providing 60 per cent of Australia’s wine exports and 80 per cent of the nation’s premium wine production, that reputation is well-deserved. But opportunities for investors in South Australia are not just limited to the wine industry. The state is renowned for its pristine growing environments both on land and in the water, with impeccable food safety standards (including fruit fly and phylloxera-free status) and an industry completely free of genetically-modified grain and food crops. With a strong regulatory environment that reduces risks in production and consumption and a skilled workforce backed by an excellent R&D sector, it is easy to see the advantages that can be gained in South Australia. Courtesy of Australia’s Free Trade Agreements with China, Japan, Korea, Singapore, Malaysia and Thailand, the market for South Australian food and wine products continues to grow. And with outstanding freight connections and cold chain logistics that can easily deliver goods all over Australia and to Southeast Asia and the Middle East, the state’s produce can reach markets quicker than ever before. In order to better facilitate investment in the state, Investment Attraction South Australia (IASA) was established in October 2015. IASA reports to Minister Hamilton-Smith and is overseen by a high-profile global advisory board comprising accomplished business leaders with experience across the globe, led by Chairman Rob Chapman, a prominent South Australian business executive. The board members serve an important function in not only providing strategic guidance to the agency, but also identifying business leads and po-

tential candidates for investment attraction. IASA offers a tailored service to potential investors and is able to simplify government dealings, provide policy and regulatory assistance, promote suitable business opportunities and provide investors with access to new technologies, services, skills or processes. The agency focuses its efforts on five key industry sectors (food and agribusiness, future industries and advanced manufacturing, financial and business services, minerals and energy and technology and creative industries) with dedicated teams offering specialised skills, experience and networks. “The agency was established to drive inward investment for South Australia with a key focus on capturing foreign direct investment, which creates high value-adding industries and sustainable jobs,” says Minister Hamilton-Smith. “IASA works with local, national and overseas businesses and targets potential investors who can further South Australia’s economic transformation and create jobs.” The focus on capturing foreign direct investment (FDI) reflects the government’s belief that it is fundamental to the state’s prosperity. Global examples over the past 20 years show that FDI brings with it jobs, growth and new technologies – things that are essential to a prosperous South Australia. “The agency can connect investors with significant investment-ready projects and provide them with unparalleled access to decision-makers to help make new projects a reality,” says Minister Hamilton-Smith. “In only 12 months of operation, the South Australian government’s investment attraction agency has generated more than 4,500 jobs and over $970 million in investment for the state.” One example of local investment secured by the IASA is leading Australian chicken meat producer, Ingham’s, who announced plans in 2016 to invest $275 million across multiple projects in Adelaide and its surrounds. This expansion alone is expected to create 850 direct jobs and 620 construction jobs. Ingham’s is expanding its facilities to meet growing demand by significantly increasing its capacity throughout the production chain. This encompasses breeding, hatching, processing, feed production and product distribution at multiple sites, and will see the company double its rate of investment. In a boon for the state, and thanks to the hard work of IASA, the majority of that investment will be in South Australia.

In terms of foreign investment, IASA has been able to secure significant FDI deals from a range of international sources. Two great examples of companies choosing to invest in South Australia thanks to IASA are the Greaton Group and Dadongwu, both from China. The Greaton Group (formerly Zhengtang) has committed to building the $300 million West Franklin apartment complex in Adelaide’s West End, a two-tower complex expected to be completed in 2019 that will provide accommodation for more than 1000 people and create 1350 construction jobs. The complex will range from apartments for low-income residents to exclusive penthouses, and helps to fulfil the South Australian government’s agenda of encouraging more people to live in Adelaide’s central business district. In March 2016, South Australian firm Micromet signed a joint venture agreement with Chinese company Dadongwu to manufacture technologically-advanced wastewater treatment equipment for the Chinese market. Micromet’s technology removes pollutants such as sewage, grey water and industrial effluents from contaminated water, and could help address serious problems with water quality in China. Micromet representatives were part of the South Australian Premier’s trade delegation to China in 2015, and the relationship between the two companies was further facilitated by IASA. Under the joint venture, $2 million will be invested to establish facilities in Adelaide to manufacture Micromet’s equipment for the Chinese market, employing at least 75 people. “Customers are telling us that they want to invest, but they want a partner to walk with them through the journey – IASA provides them with that partnership,” says an IASA spokesperson. “The message is that we are open for business and there has never been a better time to do business in South Australia.” There are endless opportunities for investors in South Australia, especially in the state’s booming agricultural and agribusiness sectors. With the establishment of IASA to guide investors and simplify dealings with government, and its formidable track record in such a short period of time, the future of investment in South Australia certainly looks promising.

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05/FOCUS ON AUSTRALIA’S STATES AND REGIONS

New South Wales – a leader in agriculture and food production n An innovative grains industry including large scale broad acre cropping

ew South Wales has the most diverse agriculture and food production in Australia, producing some of the finest food, wine, fibre and grain in the Asia Pacific region. The $12 billion NSW primary industries sector plays a critical role in driving the state’s economy and is a foundation for thriving rural and regional communities, directly providing 100,000 jobs. Well-placed (both geographically and economically) to feed the future of the Asia Pacific region, NSW’s 42,000 farmers are regarded as some of the most efficient in the world. They manage over 70 per cent of the land in NSW using sustainable farming systems coupled with strong management of water, soil and other natural resources. These farmers and producers are determined to maintain their strong reputation as industry leaders, and are actively managing the state’s natural resources for future generations. Valued at $6.7 billion in 2015, NSW’s food and agricultural exports are supported by a world-leading biosecurity framework that ensures ongoing access to crucial trade markets and protects the state’s reputation for ‘clean and green’ agriculture. With the world population projected to reach 9 billion by 2050, the NSW government has taken important steps to guarantee food security in the state. NSW is domestically and globally renowned for its high quality, safe and reliable produce and, thanks to the NSW Food Authority, has strenuous regulations which ensure complete traceability of all its products along the entire supply chain. As such, the agriculture trade and export process in NSW is highly experienced and reliable, with well-established long-term export channels, geographical proximity to the growth regions of Asia and direct shipping lines to Asia from three major ports. New free trade agreements with China, South Korea and Japan provide significant opportunities to grow exports to key markets. For example, the recently-signed free trade agreement with China will see the abolition of a range of tariffs on NSW exports to China over four to 11 years, including on dairy products, beef, sheep meat, wine and horticulture products. With a deserved reputation for high agricultural productivity and diversity, the NSW farming sector includes:

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enterprises, producing up to 10 million tonnes of wheat each year n A highly productive cotton industry with NSW growing around 65 per cent of Australia’s crop, worth just under $1 billion. NSW has produced the highest yields per hectare and per megalitre of water in the world for the last 20 years n Beef breeding, grass based fattening and feed lotting n A technologically advanced dairy industry, focussed on fresh milk production n A highly developed wool and lamb industry recognised globally for its quality n Pork and poultry industries focused on achieving optimal animal welfare outcomes n A developing aquaculture industry meeting growing global demand for seafood, with particular strength in oyster production n A diverse fruit and vegetable industry with good capability in citrus, table grapes, stone fruits, macadamias and brassica vegetables n The NSW wine industry produces world-renowned premium wines and is home to nine of Australia’s top 20 wine exporters n NSW also produces high volumes of barley, sorghum, oats and edible oils such as canola, and is home to a sizeable food manufacturing industry. As NSW is a major hub for the ICT sector and home to several world-class universities, the state’s rapidly evolving agriculture industry is supported by world-leading research into agricultural productivity, food security, biosecurity, fisheries and ecosystems. Up to 900 agricultural research and development projects across the state are funded by millions of dollars in investments from the NSW government. World-class facilities such as the Elizabeth Macarthur Agricultural Institute, home to NSW Department of Primary Industries Centre of Excellence for Animal and Plant Health, help maintain the disease-free status that provides a competitive advantage for NSW and Australian livestock and plant products in international markets.

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05/FOCUS ON AUSTRALIA’S STATES AND REGIONS

New South Wales: open for business Boasting the largest state economy in Australia, New South Wales – powered by its capital city of Sydney – has unbridled potential for investment. Led by a government focused on cutting the red tape that constricts business, the state’s highly skilled workforce enjoys world-class services and high standards of living.

ew South Wales (NSW) is the oldest and most populous state in Australia, having been founded as a colony in 1788 when the First Fleet landed in Sydney. With a population that now totals approximately 7.5 million people, NSW contributes $513 billion to Australia’s gross domestic product (GDP) – nearly a third of its total. This makes the NSW economy on its own larger than that of Hong Kong, Singapore, Malaysia or the Philippines. A LEADER IN ECONOMIC PERFORMANCE Under the leadership of Premier Mike Baird, the government of NSW has undertaken a wide-ranging strategy to make the state the premier business destination in the Asia-Pacific: financial incentives and tax breaks have been offered to entice foreign companies and investors, while red tape and excessive regulations have been removed. With these obstacles to business gone, companies of all sizes and across all industries have been attracted to the state. Already the best-performing state economy in Australia, strong, continued growth is forecast for New South Wales. The state has earned a rare AAA sovereign credit rating from both Standard and Poor and Moody’s credit-rating agencies, signalling its exceptional economic performance. NSW is also Australia’s most attractive state for foreign investment, having received $52 billion worth of private business investment in 2013-14 alone. At the helm of this economic titan is the city of Sydney, NSW’s capital and Australia’s oldest and largest city. With a population of 5.25 million people, Sydney is now in its 25th year of uninterrupted economic growth – a feat that is unprecedented in the developed world. The diverse city contributes the bulk of NSW’s GDP, and an incredible 22 per cent of Australia’s total GDP. Why is Sydney such an attractive destination for foreign business and investment? One of the leading reasons is the high quality of living the city offers: Sydney ranked 10th out of 230 cities in the 2015 Mercer Quality of Living Survey and has more festivals and public celebrations per year than New York, London, Berlin and Madrid. The ease of doing business in Sydney is another major draw for foreign companies and investors. Sydney ranked 13th out of nearly 200 top global cities in

the World Bank’s 2016 Ease of Doing Business report and scored even higher in the categories of access to credit, enforcing contracts and starting a business. Sydney also boasts a vibrant and diverse population: more than a quarter of its residents were born overseas, and more than 300,000 Sydneysiders speak a Chinese language with significant numbers also speaking Vietnamese, Korean, Indonesian or Hindi. Many of these people are tertiary-educated and highly skilled – a major strength for Sydney’s workforce and position as a global city. STRENGTH IN INDUSTRIES LEADS TO OPPORTUNITY Under the ‘open for business’ policy NSW has quickly become a very attractive location for trade and investment, particularly from Asia. As a result, the state is extremely well-positioned to capitalise on the raft of economic opportunities arising from historic free trade agreements (FTAs) recently secured between Australia and China, Japan and Korea. Increased trade as a result of these agreements will inevitably create exciting new investment opportunities. Even before the signing of these FTAs, trade between NSW and Asia had more than doubled over the past decade, with Asia receiving a huge 71 per cent portion of the goods exported from NSW. This relationship goes both ways, with the state receiving 72 per cent of all Chinese investment in Australia in 2014. In the agribusiness sector, there is strong international demand for a diverse range of foods from NSW. The state is renowned for its clean, green and safe produce – a vital selling point, particularly for Asian consumers who are interested in finding a stable and safe source of food. Luckily NSW has much to offer, being the country’s largest producer of rice, wheat, wool, cotton and citrus fruits, and also housing sizable dairy, beef, seafood and wine industries. With demand for premium products increasing at an exponential rate across the Asia-Pacific region, there are great investment opportunities in both the food and agricultural sectors. For Asian businesses looking to invest, NSW not only offers the premium products that are in demand in Asian markets and the capacity to scale up production in the future, but also physical market proximity, access via both air and sea and a favourable time zone for communication.

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A FOCUS ON INFRASTRUCTURE The NSW government has prioritised infrastructure in both the city of Sydney and the state as a whole, planning record levels of investment in the coming years (including over $73 billion of allocated government funding over the next four years alone). A strong transport system has been identified as crucial to enabling continued economic growth, improving quality of life for residents and easing the cost of doing business. Sydney is home to Australia’s largest and busiest airport, accounting for roughly 40 per cent of the international passenger movements in the country. With 280 weekly departures to Asian destinations and unrivalled proximity to the city centre (the airport is just 8km south of the CBD), Sydney Airport is the main gateway in and out of Australia. A second international airport is planned for the fast-growing region of Western Sydney in order to meet future infrastructure needs. Based in the suburb of Badgerys Creek, the airport will be serviced by major road projects that are currently under construction. In addition to its existing and upcoming air links, the state of NSW is also home to three major ports including Port Botany, which conveniently neighbours Sydney Airport in the city’s metropolitan area. The construction of the Sydney Metro – Australia’s largest ever public transport project – is currently underway, involving the installation of 30km of new rail lines, a second harbour crossing and several new train stations. Hong Kong’s MTR Corporation is a key player in the Metro project and a 60 per cent shareholder in the joint venture responsible for running the rail operations of

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the Sydney Metro North West line from 2019. The North West line will deliver a train every four minutes during peak hour, and promises to provide a level of customer safety and service never seen before in NSW. MTR Corporation currently operates one of the world’s most efficient rail systems in Hong Kong, where trains run every two minutes on the busiest lines and are on time a staggering 99.9 per cent of the time. MTR also currently run the Melbourne Metro system, and their investment in NSW is an exciting step that will position the state at the forefront of urban rail infrastructure. FINANCIAL HQ FOR THE REGION Sydney is one of the biggest – and best performing – financial centres in the world. According to the World Economic Forum, Sydney is ranked third in Asia and fifth in the world for economic performance. The city manages the bulk of Australia’s financial services and the nation has the largest pool of funds under management in Asia ($2.6 trillion as of June 2015). Sydney is also home to the regional headquarters of 600 multinational companies – more than are in either Shanghai or Tokyo. The finance and insurance industry is the largest industry in NSW; with a value of $61 billion it makes up 12 per cent of the gross state production. NSW is the base of operations for 62 per cent of financial services companies in Australia, with Sydney home to over 90% of international financial institutions in Australia. Sydney also houses the headquarters of the top five banks of China, and is Australia’s Renminbi trading hub. And it is not just Chinese banks that have been drawn to Sydney by the

to put NSW products in front of hundreds of millions of potential customers.

attraction of living and doing business in NSW. In 2015 Japan’s largest bank, the Bank of Tokyo-Mitsubishi UFJ (BTMU), held a dinner in Sydney celebrating the 30-year anniversary of being awarded a banking licence in Australia. At the dinner BTMU’s chief executive for Asia and Oceania, Go Watanabe, said Japanese companies were increasingly keen on doing deals in Australia because of the country’s growing population and relatively high incomes. He said this was largely the result of Japan’s ageing and overall declining population, as medium- and large-sized companies realised they had to look for opportunities outside of Japan in order to grow. The opportunities are wide-ranging: in 2014, Japanese retail giant Uniqlo launched in Australia (with five of their 11 stores nationwide located in Sydney) and in early 2015 Japan Post acquired logistics company Toll Holdings (founded in the NSW city of Newcastle in 1888) for $6.5 billion. THE INNOVATION ECOSYSTEM Support for innovation has put NSW at the top of the tree when it comes to digital technology, an industry now worth $70 billion to the state. With more and more leading international technology companies choosing Sydney as their base, the city has been ranked as one of the top three startup ecosystems in Asia. In 2015, NSW businesses spent more than $6.6 billion on research and development – 35 per cent of Australia’s total R&D spending. Tech innovations developed in the state of NSW include: Google Maps (developed in Google’s Sydney headquarters), Cochlear’s revolutionary bionic ear and the technology behind Wi-Fi (developed by CSIRO in their NSW labs). Roughly 65 per cent of Australian technology startups are based in NSW, and the vast majority of these are in Sydney. Cloud computing company Salesforce recently shifted its regional headquarters from Singapore to Sydney, where it currently employs 500 Sydneysiders. Other digital giants have recently made similar moves to Sydney, including SurveyMonkey and Dropbox. With a huge number of consumers – especially in Asia – turning to the online marketplace to meet their needs, the challenge at hand is to leverage Asia’s enormous online sales platforms

UNRIVALLED EDUCATIONAL SERVICES When it comes to education, NSW institutions are global leaders in their field. The state is home to four of Australia’s top ten universities, and two of the world’s top 50. NSW provides education services to more international students than any other Australian state, with over 200,000 international enrolments in 2014-15. Looking to benefit from the state’s reputation in this area, in 2015 the NSW government funded a program that took representatives from ten education technology startups to visit a range of Chinese businesses. China has long demonstrated an appetite for Australian educational services, and the program was an initiative to expand this hunger beyond simply encouraging Chinese students to attend Australian universities. With a variety of programs and innovations focusing on skills and support software for education, the ten NSW tech startups visited companies in Guangzhou, Shenzen, Beijing and Shanghai in a matchmaking process of sorts to help connect them with potential business partners. One of these startups, Inkerz, entered the Chinese market after signing memorandums of understanding with companies Shenzhen Yifang Digital Technology and Shijiazhuang Dazhong Network Communication on this mission. Founded in 2014, Inkerz is an online collaboration platform that takes handwritten words, notes or graphs and turns them into digital form in real time. INVESTING IN A STRONG FUTURE NSW’s economic performance over the past few years means that the state’s workforce and businesses can have confidence in continued growth and financial security well into the future. With a government focused on removing the obstacles to trade and investment and a standard of living virtually unmatched in the world, companies are flocking to NSW – and particularly Sydney – to set up offices and do business. As a result, investors in NSW (both foreign and local) are confronted with a flood of exciting opportunities across many industries. The demand for premium and clean food products coming from Asia combined with NSW’s strong infrastructure means there is a huge capacity for growth in the agribusiness and food sectors. And due to record levels of government investment in major infrastructure projects, whole new parts of Sydney and the wider state will soon be even closer and more accessible to key ports and business hubs. In finance, education and innovation, NSW leads the way not only in Australia but also in the entire Asia-Pacific region. Businesses in these sectors are undeniably drawn to a state that is both a financial hub and a provider of unparalleled educational services and cutting-edge technological innovation. NSW is open for business, and the investment opportunities are huge.

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05/FOCUS ON AUSTRALIA’S STATES AND REGIONS

Canberra: knowledge capital of Australia Canberra is a leading centre in the field of scientific and agricultural research, an area in which it offers great opportunities for investment and collaboration. With a long track record of innovation and several world-class research facilities, Canberra adds value to the agribusiness industry through knowledge that has led to significant global outcomes.

ituated in the Australian Capital Territory (ACT) among some of the best farming and grazing land in the country, Canberra is the nation’s capital – a planned city built from 1913. The history of Aboriginal occupation in the region dates back 21,000 years, and its excellent farming conditions attracted European settlers from the early 19th century. As a hub for research, government and innovation, the ACT has a Gross State Product (GSP) of $35 billion and has seen average growth of 2.7 per cent per year in the last decade, with ‘Canberrans’ enjoying an income 40 per cent higher than the national average. Canberra is also the home of world-class research facilities such as the Commonwealth Scientific and Industrial Research Organisation (CSIRO) Agriculture and Food Flagship and the Australian National University. From a business and trade perspective, Canberra is the administrative and policy centre for government programs and rural development and is thus the

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best place to start when looking for international opportunities and government/business collaboration. Given the city’s research strength, there are great opportunities for investment and collaboration in plant science and digital and precision agriculture. Cutting-edge research conducted by CSIRO in Canberra helps farmers and food processors operate in a more profitable and sustainable manner, which in turn helps them build partnerships with companies from around the world. Some examples of their innovative research include developing tools that can measure cattle body condition remotely, collect crop yield information during harvest, map soil information via an app and protect plants from pests and diseases, to name just a few. However, innovation in the Canberra region predates the city itself. English-born William Farrer, known as the father of the Australian wheat industry, migrated to the country in 1870 and began trying to breed improved strains of wheat on farms across the state of New South Wales (NSW). He eventually settled on farming land near what is present-day Canberra. While working for the NSW Department of Agriculture, Farrer developed the ‘Federation’ strain of wheat at the turn of the 20th century. Federation is a high-yielding strain of wheat that was suitable to Australian harvesting conditions, and its distribution and uptake saw rapid and sizable increases in Australia’s wheat harvest. For his contribution to agriculture in Australia, Farrer was featured on the Australian two dollar banknote (no longer in circulation) and had a suburb of Canberra and a division of the House of Representatives named in his honour. Building on the research tradition established by Farrer, CSIRO’s presence in Canberra was established in 1927 at Black Mountain (now the site of the Agriculture and Food Flagship) with a particular focus on agricultural research. Over the years, researchers and scientists in CSIRO’s Canberra sites have played a role in a number of innovations crucial for the agricultural industry. These have included the discovery of C4 photosynthesis, the identification and development of rust resistance in plants, the development of SIROFLO (a novel fumigation technique that helps with the safe storage of grains), the

breeding of new varieties of cotton and the pioneering of GrazFeed (a grazing modelling program widely used by Australian graziers). In 2015, CSIRO purchased farming land in Booroowa, just outside Canberra, to extend the organisation’s research ability. The farm is a trial site for the application of technology to agricultural practices, allowing researchers to conduct field trials in a range of disciplines. Also based in Canberra, the Australian Centre for International Agricultural Research (ACIAR) conducts research aimed at facilitating improvements in agricultural practices and profitability in developing countries. The ACIAR is notable for its strategic partnerships in China that aim to improve the sustainability of agricultural production by Chinese farmers. This research is across all agricultural disciplines, focusing on both raising farmers’ incomes through increased productivity and marketability and assisting those most affected by poverty and food shortages. The ACIAR is a highly collaborative institution that offers significant investment opportunities both domestically and with Chinese partners. In addition to the research conducted at CSIRO and ACIAR, Canberra also boasts the Australian National University (ANU) – one of the world’s highest-ranked universities for post-graduate research and education in biology and plant sciences. Research undertaken here has wide-ranging implications for the future of global food production. International research led by the ANU includes work that has uncovered how plants such as wheat and rice sense and respond to extreme drought stress. This breakthrough could be significant in developing the next generation of drought-proof crops, helping to reduce the impact of drought and ensure global food security. Professor Graham Farquhar has pioneered plant photosynthesis research at the ANU that is helping to create crops that use water more efficiently. He describes Canberra’s collaborative research environment, particularly in the sphere of agricultural research, as a major enabler of his research activity. With CSIRO, ACIAR and the ANU accompanied by the Grains Research and Development Corporation (GRDC) and the national office of the federal department of Agriculture and Water Resources, Canberra has surged as a leader

in agricultural research. “It’s a big advantage having a strong plant science basis here at the ANU, and the Agriculture and Food Flagship at CSIRO is just up the road,” says Professor Farquhar. “As a result of the collaboration between all these facilities, Canberra is one of the key plant research centres in the world.” In an indicator of the strength of Canberra’s collaborative research environment, CSIRO and the ANU are working together to create the National Agricultural and Environmental Sciences Precinct (NAESP) – a globally significant research and innovation precinct focused on agriculture. The aim of the NAESP is to foster research that applies the latest technology to food production in order to create new industrial agricultural crops and generate new companies based on the intellectual property and know-how developed. One facet of the NAESP is the Centre for Genomics, Metabolomics and Bioinformatics, which opened in 2016. Research at the Centre will utilise the existing strengths of CSIRO and the ANU and incorporate the latest digital technology to make discoveries in plant biological science that will benefit global food security and environmental management. It’s not just Canberra’s standing in agricultural research that attracts top scientists and researchers to the region – the lifestyle is also a considerable bonus. Rare for an Australian city, Canberra is a planned city and therefore enjoys very low commute times. Canberra is just three hours’ drive from Sydney, and – in addition to a strong focus on the arts within the city – is surrounded by national parks and nature reserves. “It’s also a wonderful place to work and raise a family, with easy access to the environment – mountains, forest and sea,” says Professor Farquhar. “I can’t think of any other place where you can do high-level international research in an attractive environment like Canberra.” When you combine Canberra’s array of world-class research facilities with its history of innovation, proximity to government and excellent lifestyle, it is easy to see why the city has a reputation as a world leader in agricultural and agribusiness research. Canberra is uniquely suited for investment and collaborative opportunities across a range of disciplines.

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05/FOCUS ON AUSTRALIA’S STATES AND REGIONS

The rivers of the inland How do you coordinate four states and a territory and thousands of demands on a valuable and very finite resource? It’s not easy – but that’s what the Murray-Darling Basin Authority does. G R AE M E P H ILIPSON discovers what makes this important agency tick.

hen the first European explorers crossed the Great Dividing Range and found Australia’s inland rivers, they wondered at the fact that they flowed west, into the interior of the continent. Some imagined a vast inland sea. Eventually they found that nearly all the inland rivers, from southern Queensland to Victoria, find their way into the Murray River, which empties into Lake Alexandrina on the shores of Encounter Bay, 75 km south-east of Adelaide. Explorer Charles Sturt came across the lake in 1830 after following the Murrumbidgee and Murray rivers downstream from present day Wagga Wagga, also confirming on that journey that the longer Darling River was part of the same great river system. The Murray–Darling Basin is one of the largest river basins in the world. It covers just over a million square kilometres, or 14 per cent of Australia’s land area. That is around the same area as Spain and France combined. It is home to more than two million people. Total river length is 77,000 km, including Australia’s three longest rivers. It includes virtually all of inland NSW and the entire northern half of Victoria. It takes in the Darling Downs in Queensland, and South Australia’s Riverland. At its eastern end is Australia’s capital city, Canberra. The city stands on Lake Burley Griffin – formed by the dammed Molonglo River – which flows into the Murrumbidgee, the Murray’s greatest tributary. The Basin produces one third of Australia’s food supply. It contains 40 per cent of Australia’s farms and 70 per cent of its irrigated farmland. It produces almost all of Australia’s rice and cotton and two thirds of its grapes. More than half Australia’s fruit is grown in the Basin, and it is home to nearly half the country’s sheep. These remarkable statistics illustrate the Basin’s premier position as Australia’s most important agricultural area. It has been farmed intensively for over 150 years, much of it with extensive irrigation systems. Australia is the world’s driest inhabited continent, with much of the inland

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receiving only sporadic rain. The water from the Murray and the Darling and their many tributaries have been extracted for irrigation for many years, up and down the thousand kilometre length of the Basin. Irrigation proliferated after World War One, with the Murrumbidgee Irrigation Area the model for many others. Orchards grew on barren land, fed by canals and weirs. But there was, and is, only a finite amount of water. The acceleration of cotton and rice farming in the 1970s squeezed things tighter, as they are both heavily dependent on water. By the 1970s the demand on water in the Basin was causing massive ecological problems. Wetlands were drying up more frequently and the mouth of the Murray River closed for the first time in 1981. People downstream, especially in South Australia where the Murray River provides Adelaideâ&#x20AC;&#x2122;s water supply, were complaining about people upstream using too much water. A DELICATE ECOLOGY Australiaâ&#x20AC;&#x2122;s rainfall is highly variable between regions, seasons and years, and most parts of the country are subject to periodic droughts. The so-called Millennium drought, which affected much of Australia including the Murray-Darling Basin from 1996 to 2010, was the most severe in recorded history. The drought exposed the limitations of how water was used in the Murray-Darling Basin. There was not enough water to flush salt and nutrients out

to sea, nor enough to maintain water levels in lakes and wetlands in the lower part of the Basin, which exposed acid sulphate soils. National rice production plummeted, and national sheep numbers fell from 91 million to 54 million. Almost five million cattle died. The mouth of the Murray was kept open only by constant dredging. Wetlands and floodplains from the north of the system to the south all experienced environmental degradation. Some irrigators received no water in years, while towns and cities experienced harsh water restrictions. During the drought of 1966-67 the effects of salinity became clear. Salinity levels spiked sharply, prompting governments to commission a detailed study of irrigation, drainage, and the impacts of salinity on the Murray River. The findings of this study ultimately led to a succession of robust and effectual salinity management plans, and the construction of more than a dozen large-scale interception schemes across the most heavily affected areas of the Basin. This intervention led to significant decreases in the volume of salt entering river systems, protecting valuable agricultural production, and enabling water quality to remain above drinking quality for more than 95 per cent of the time. Salt Interception schemes have also created salt harvesting enterprises, producing local economic benefits. Australia is especially vulnerable to the impacts of predicted climate

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change. Leading science and weather agencies report that daily temperatures across Australia have increased by an average of 0.9°C since 1910, and are projected to rise by 1.0 to 5.0°C by 2070. Higher temperatures will mean more evaporation and less inflow to rivers. Average annual rainfall is less than 600 millimetres over 80 per cent of Australia’s landmass, and below 300 mm over 50 per cent of it. The Basin contains a diverse range of climatic zones ranging from sub-tropical conditions in the far north, cool humid eastern uplands, the high alpine country of the Snowy Mountains, the temperate southeast and the hot, dry semi-arid and arid western plains. The high-rainfall mountain districts in the east account for only 5 per cent of the Basin’s land area, yet contribute more than half its runoff. Many of the Basin’s watercourses carry water or connect to other rivers only in times of above average rainfall. At the best of times Australia’s river systems carry small volumes of water for their size. As an example, the average yearly flow of Australia’s longest river, the Darling, is less than the flow of the Amazon River in a single day. It is 3 per cent of the annual flow of the Mississippi. Further, the natural flow of rivers has been altered by the construction of major dams and weirs, particularly in the southern part of the Basin. These rivers once flowed more strongly in winter and spring, whereas now their flows peak in summer and autumn to match the demands of irrigators. Changes to seasonal peaks can affect breeding and feeding opportunities for most of the water dependent native animals in the Basin, while seasonality of flooding is also important for native plants. For more than a hundred years, the infrastructure and management of the Murray-Darling Basin has largely been developed to secure social and economic outcomes. Many rivers have been modified and become highly managed systems to supply drinking water to towns and cities, support agriculture, mitigate floods and droughts, and allow for navigation. Landcare groups, catchment management bodies, natural resource management groups – as well as individual landholders – have also been undertaking work to improve the health of their local environments for some time. Governments have instituted significant reforms such as imposing a cap on surface water use in 1995. They also invested significant funding to recover water for the Basin’s river system through programs such as The Living Murray program. Despite the historical effort to redress the balance in water consumption, better water management was needed – drought or no drought. This led to the development of the Water Act and the formation of the Murray-Darling Basin Authority.

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The creation of the MDBA was the first time ever that the Basin was managed as a whole AUSTRALIA’S WATER MANAGEMENT CHALLENGES Australia has a federal system of government. Powers are divided between the central government and individual states and territories, which retain the power to make their own laws over many matters. Managing water across state boundaries involves significant liaison and consultation as states retain significant powers for implementing water planning. Decisions about water management have led to some of the most important developments in Australia’s history. One of the key rationales for the giant Snowy Mountains Scheme after World War Two was to turn back the ‘wasted’ water that was flowing east, back to the rivers of the inland, through giant tunnels under the mountains, into the Murray-Darling river system. The Snowy Mountains Scheme was the largest engineering project ever undertaken in Australia. Built over four decades from the 1940s, this scheme consists of 16 dams and over 200 kilometres of tunnels. To create electricity, the headwaters of the Snowy River and its tributaries (which are outside of the Basin) are captured and diverted into the Murray and Murrumbidgee Rivers, contributing to Basin inflows. The Murray-Darling Basin covers four states (NSW, Victoria, Queensland and South Australia) and the Australian Capital Territory. That means six governments are involved, including the Federal government. There are 13 catchment management authorities and a number of local boards involved in matters that affect water management in the region. Any sort of coordinated approach has been very difficult. After decades of wrangling, an agreement was reached between the states and the Federal government. In 2007 the Water Act 2007 commenced and it was fundamental to the development of the Basin Plan. It established the Murray-Darling Basin Authority (MDBA) as an intergovernmental body to ensure that the Basin’s water resources were managed in an integrated and sustainable way. It operates as an independent statutory authority, reporting to the Federal Minister for Agriculture. Rivers, wetlands and floodplains are best managed on a catchment, or river basin, scale. The creation of the MDBA was the first time ever that the

Basin was managed as a whole. The first Basin Plan on 22 November 2012 was a significant step in the century old history of collective water planning and management in the Murray-Darling Basin. It establishes new ways of addressing Basin water planning, and is intended to be fully implemented by 2024. The central element of the Basin Plan was the introduction of a sustainable limit on surface and groundwater diversions, called a ‘sustainable diversion limit’. The Plan sets limits on the quantity of water that may be taken from the Basin’s water resources as a whole (10,873 GL per year) and from particular water resource plan areas. This limit equates to a need to reduce average surface water use by 2,750 GL across the Basin. For groundwater, the Basin Plan sets 3,324 GL per year as the sustainable limit. For the first time in the Basin’s history planning decisions are being made in the interests of the Basin as a whole. It is also the first time that environmental watering is being managed at a Basin-scale and for Basin-wide outcomes. Over time a more holistic view has developed of the interconnectedness of water resources and the needs of people and ecosystems dependent on them. The water that is recovered for the environment is then used under the same entitlements that operate for other users. To support this process the Australian government has provided significant funding for purchasing water entitlements and infrastructure projects, including the modernisation of irrigation networks. Environmental water is actively managed and delivered cooperatively by government agencies at the state and federal level. The Basin Plan includes an environmental watering plan and a water quality and salinity management plan to coordinate the delivery of environmental outcomes across the Basin. For the environment, the Basin Plan aims to: n get more regular natural flows across floodplains n increase the abundance of the Basin’s waterbird and fish populations n improve the extent of river red gum forests and wetland vegetation n reduce salinity and water quality problems n reduce the risk of the Murray Mouth closing. The Basin Plan sets targets and objectives to protect water quality for people and livestock, as well as the rivers, wetlands and floodplains. Following a review of salinity management, Basin governments have prepared a new strategy to continue to jointly manage salinity in the Basin from 2016 to 2030. The Basin is also an exporter of water, with a number of pipelines providing water for domestic use in urban and remote regional areas outside of the Basin. The longest of these pipelines covers a distance of almost 400 kilometres.

SOCIAL AND ECONOMIC CONSIDERATIONS As the Basin Plan is implemented, the MDBA is monitoring and evaluating the social and economic outcomes of putting water use on a sustainable footing for Basin communities, industries and the environment. Farmers are now using water more efficiently and changing the way they trade water in response to the combined effects of the Millennium drought, economic and policy pressures and the Basin Plan. The Basin Plan provides opportunities to encourage Aboriginal perspectives to be heard, to assist Aboriginal values to become more widely understood and for Aboriginal people to be valued participants in water planning. This includes states considering the views of Aboriginal people about cultural flows in water resource plans. The MDBA also considers advice from Aboriginal organisations when assessing state water plans. Tourism and recreation activities are also important — based around waterways, native red gum forests and wetlands. The forests, made up of 60,000 square km of floodplain and 30,000 wetlands, support a wide variety of Australia’s unique plants and animals. Australia was one of the first signatories to the Ramsar Convention on Wetlands of International Importance. There are 16 listed wetland sites within the Basin and a 140,500 hectare estuary at the Murray Mouth. Australia has agreements with China, Japan and Korea on the conservation of migratory birds. There is also a range of domestic legislation aimed at protecting biodiversity and significant cultural sites in the Basin. The MDBA has also started compiling information on the potential social and economic benefits of a healthier environment resulting from environmental watering. There are opportunities to reduce the amount of water that needs to be recovered as long as environmental, social and economic outcomes are maintained or improved. New rules for the water markets have made it easier for irrigators and other water users to manage water entitlements, and to trade them if necessary. The MDBA will continue to analyse the social and economic information it has been gathering to build a picture of changes that are happening in Basin communities, with the aim of separating the effects of the Basin water reforms from other sources of change. Overall the Basin Plan will help put the Basin’s rivers, wetlands and floodplains on a pathway to long-term sustainability, and better able to support the communities and industries that rely on them. The Murray-Darling Basin is the heartland of Australia. Its continued well-being is important to every Australian.

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05/FOCUS ON AUSTRALIAâ&#x20AC;&#x2122;S STATES AND REGIONS

The untapped potential of northern Australia Northern Australia has substantial areas of undeveloped lands with untapped water resources and soils that are suitable for more intensive food and fibre production. So where do the opportunities lie? And what are the challenges? D A V ID CRO MB IE, Director of the Australian Agricultural Company and former President of the National Farmersâ&#x20AC;&#x2122; Federation, provides some answers.

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MEETING THE FOOD DEMAND The increasing population and economic growth of countries in the Asia-Pacific region are driving an increasing demand for food and creating competition for natural resources – in particular, scarce arable land and fresh water. Governments are being challenged like never before to make the right political choices for their communities and for the environment. By 2050, there will be a major population change in the Asia-Pacific region with the emergence of more than 600 million middle income earners. Not only will there be more mouths to feed, but there will also be a shift in the nature of food and fibre demand as a result of economic growth. So where will the extra food come from? There is no new Green Revolution on the horizon, and there are limits to the development of new lands for food production. This represents a great opportunity and also challenges for Australian agriculture. Australia can improve its productivity and we can develop more land, particularly in the North, to meet expanding markets for our high quality natural foods. Despite the popular portrayal, we should not aspire to be the “food bowl” for Asia. The future of our farm sector is not in the production of base commodities, competing in a world market against countries with a cost base that

is half of ours. Our target should be the production of differentiated foods and fibres to supply the expanding segment of middle income Asia – consumers who are seeking safe and reliable high quality products and who can afford a premium price. None of this will fall into our lap. We will have to earn our right to play in this expanding marketplace and one of the keys to meeting this opportunity is unlocking the development potential of northern Australia. We can continue to improve our farm productivity and we can develop more land. This is particularly true in the North where there is an estimated 16 million hectares with adequate rainfall and soils suitable for more intensive production, plus sustainable surface and ground water reserves for an estimated 1.6 million hectares of irrigated crops. Australian agriculture is highly regarded in world food and fibre markets. We have a reputation for high-quality, safe foods and the ability to supply high-end customers directly via controlled supply chains that are backed by ethical production systems. This reputation is our competitive advantage and the agri-business opportunities are real, especially in the North where products have easy access to major Asian markets. To achieve the desired outcomes will require public investment in the North and consistent long-term policy settings across jurisdictions to empower entrepreneurial spirit and to attract the required skills and development capital. AUSTRALIAN AGRICULTURE GOING FORWARD Our farmers currently feed and clothe some 60-70 million people. We have the capacity to increase this significantly, and we will need to do so if we are to play our part in meeting expanding food demand. Much of this potential increase can come from the development of underutilised land and water in the tropical and sub-tropical areas of northern Australia. Investment in this development is happening now. There are an increasing number of corporate investors in Australia and from overseas who recognise the opportunities for soft commodities in the Asian growth region. Investment brings new capital, new ideas, new jobs and new market access. We should monitor this but we need not be afraid of it – our agriculture has been developed with foreign capital. Corporations – whether they are Australian or foreign – can turbo-charge development, creating real local jobs and paying local taxes. If these investors exit, they leave the assets and the knowledge behind. Perhaps the biggest challenge to achieving our potential is managing community perceptions – perceptions around investment itself, around environmental management and biodiversity, around the carbon cycle and around the ethics of animal management. Over 80 per cent of Australians live in our coastal cities. The maths is simple – most of the votes are in the cities and politicians respond to public opinion, informed or otherwise. A vacant landscape in the North is no solution – not for better environmental delivery, nor for meeting the global challenge of food and fibre demand. We have the opportunity – indeed, the global responsibility – to develop underutilised lands in northern Australia to their potential. We can do this by taking into account the needs of communities and the environmental health of the region, but we need new investment to achieve these goals. So how will this be achieved? POLICY DEVELOPMENT Investment needs strong, science-based government policy consistent across

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all jurisdictions. Policies at the national, state and local levels provide guidelines that empower investors and our farmers to get on with the job. We need policies that are appropriate for the farm, but which also stretch beyond the farm gate with minimal regulation. Policy development needs to take into account the following areas: RESOURCE DATA: Good policy development and sound investment decisions require good base data on the existing natural resources – data on surface water, ground water, sustainable flow volumes, soil fertility and mechanical structure, vegetation, fauna biodiversity and information on littoral and riverine eco-systems and their interdependencies. Much of the data is known but there are still data gaps, particularly in the North, and these need to be addressed as a matter of urgency and supplemented by research projects to explore areas of uncertainty. The lack of perfect data cannot be an excuse for weak policy development and resultant delayed commercial decisions. PRODUCTION RESEARCH: Our challenge is to produce quality foods and to produce more with less – more quality food more quickly, using less water, less fertiliser, reduced chemicals and less labour. If we are going to produce more with less, we will need all of the tools in the tool box. GMO’s are not a silver bullet, but they are one of the tools and we should be doing the research and educating the public while retaining consumer and producer choice. BETTER MARKET ACCESS: Australian farmers are amongst the most efficient and least protected in the world. We need open market access so that our food can move unimpeded to areas of growing demand. WATER POLICY: There are extensive undeveloped water resources across northern Australia and we need to harness opportunities for their sustainable use. We must balance the interests of the environment, regional communities and food production – there needs to be certainty of entitlement for all water users. This will require better data on surface and sub-surface water flows, as well as their interconnectivity and recharge, to allow estimates on sustainable use. Licencing is being developed based on this improved data to provide certainty of entitlements as a basis for planning and investment security. LAND TENURE: Like water policy, land tenure is being progressively developed based on data for existing and potential sustainable land use. It can provide flexibility where there are alternative uses and security of title to underpin long term investment decisions. The management of Indigenous lands and water should be no different. There are areas of cultural significance and biodiversity that need protection, and there are areas where local communities require and should have the opportunity for commercial development. INFRASTRUCTURE: Any development in the North will require supporting infrastructure including roads, rail and ports, and also the necessary social infrastructure in communications, health services and education. This is needed in order to attract the skilled workforce that will be required if development outcomes are to be realised. BIOSECURITY: Our competitive position rests on our clean natural production systems. Import risk analysis is a continuing priority if Australia is to be able to provide comfort to our customers in relation to product integrity. We need to continue to provide strong border security and the capacity to chase breakdowns. MINING AND URBAN EXPANSION: We need to find solutions that recognise the long term value of food production that are protective of environmental assets including water drawdown and quality. We also need to provide a fair sharing of benefits with royalties over the life of the development for land

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owners and local communities. SUMMARY Australian farmers are outstanding food and fibre producers. We are good at what we do and, if you believe the demographics, we are in the right place at the right time. There is significant population growth and an expanded middle income sector emerging in the Asia Pacific region. It is creating a real market for increasing high quality food and fibre products that we can produce in increasing quantities – but this production increase won’t just happen by itself. Northern Australia has significant areas of undeveloped arable land and sustainable surface and underground water that can be developed for more intensive agriculture. This will require significant new investment in the provision of development capital, new infrastructure, new technologies and the attraction of skilled labour. As a starting point, we need to assemble the baseline data and initiate research to fill the data gaps. Good and consistent policy development across national, state and local jurisdictions is required, and it needs to be based on the resource data to provide clarity and to attract the necessary development capital and skills. We will need to continue to develop infrastructure across the North including roads, rail, transport hubs and ports, as well as the social infrastructure for communications and the delivery of social services. These will improve the efficiency of our supply chains, a necessary move to meet the changing expectations of our community and our customers. Given this framework, northern Australia has the natural resources and the development potential to encourage investment. This investment is needed to take advantage of the very substantial opportunities that exist in the Asia Pacific. Through investment in the North, we can develop the supply chains for our food and fibre products to meet the expectations of discerning customers who have an expectation of quality and reliable supply.

“Water sustainability is a wider, more complex issue than many realise. As the driest continent on earth, Australia has been driven to strive and learn – over decades – about water management. Now is the time to share, in partnership and exchange.” Kaye Schofield AO, Chair, Australian Water Partnership

Read more great agricultural articles in The Australian Farmer The Australian Farmer has been designed as both a tribute to our underappreciated farmers and a unique knowledge tool to assist them. It is much more than a book, and is now available in digital (on any device). Produced after extensive collaboration with agricultural peak bodies and farmers, The Australian Farmer publication contains links to over 2,000 pages of useful data, a growing archive that truly makes the publication a knowledge tool and useful companion for the farmer.

Company Website

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Innovation in Australian Agribusiness The key to Australiaâ&#x20AC;&#x2122;s success in agriculture is innovation. Innovation is about more than technology, itâ&#x20AC;&#x2122;s also about new business models, new ways to market and new mindsets.

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Innovation in Australian agriculture Australia has a long tradition of innovation in agriculture. GRAEME PHILIPSO N looks at the current state of play, and how the state and federal governments are fostering the country’s innovators.

n the South Australian outback in 1976 a young apprentice named Richard Smith invented a remarkable device. It became known as the stumpjump plough, because its blades had the ability to jump out of the earth if they encountered an underground obstacle like a tree stump. After the obstacle was passed, the blades re-entered the soil and kept ploughing. The stump-jump plough, perfected by Richard’s brother Clarence, revolutionised farming in parts of Australia where the land was rocky or beset with gnarled and hard-to-move stumps from the Mallee tree, a hardy eucalypt common in the drier parts of the country. The plough is regarded as the archetypal Australian agricultural invention, and is a prime example of the endlessly inventive nature of Australian agriculture. Agriculture in Australia has to be innovative to survive. Australia’s farms are today amongst the most productive in the world, largely as a result of a willingness – often born of necessity – to do things a different way. Now, in the 21st century, Australian agriculture has adopted innovation as its mantra, with a range of initiatives from business, academia and government to look for new ways to make things happen. Foremost among these initiatives is FIAL (Food Innovation Australia Limited) – a government funded and industry led research initiative to facilitate collaboration and innovation in agriculture and food production (see article, page 174). The Australian government also produced the major agricultural competitiveness White Paper in June 2015 to examine practical initiatives that will enable a stronger Australian agricultural industry. It includes $4 billion in investment, and a plan to shift the focus of agricultural research in Australia to the development of on-farm technologies and programs that improve farm gate returns. Then in May 2016, an Australian Parliamentary Inquiry into agricultural innovation made 17 recommendations on areas such as the greater use of unmanned aerial vehicles (drones), greater funding for STEM (science, technology, engineering and maths) subjects in agricultural education, the establishment of national agricultural data sets and benchmarking and regulatory reform in gene technology. Another recent report, by private industry group StartupAUS and consultancy KPMG, found that agricultural technology – which it calls AgTech – has the potential to give Australia a $100 billion agricultural industry by 2030, double what it is now.

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Called ‘Powering Growth: Realising the potential of AgTech for Australia’, the main thesis of the document is that AgTech is critical in building Australia’s agricultural industry. The report limits the term AgTech to the early stages of the agriculture value chain, which continues all the way to the consumer – ‘from paddock to plate’, as the industry jargon has it. “The customer ultimately drives change by providing the demand for various types of food, the source of food, how food is delivered and limitation of wastage,” says the report. “Improved connectedness across each link of this chain will enable farmers to be better able to provide a sufficient and sustainable food supply to meet customers’ needs. “AgTech, biotech, genetech, foodtech and food ecommerce are all important elements of the integrated value chain. AgTech specifically, though, operates almost exclusively in the initial input and production phases.” The report defines this as the ‘pre farm gate’ stage. There is a lot of activity in improving technology and productivity later in the process, through the efforts of such organisations as FIAL – which is managing the new agricultural growth centre that is part of the government’s National Innovation and Science Agenda – but AgTech is defined as being limited to the early part of the process. The report gives a number of reasons why this early stage is important: n It directly contributes to a more productive, sustainable and customer focused industry n The area is relatively immature in both development and adoption n There is great potential for AgTech to be a new competitive advantage for Australia as an exporter and producer n Ag Tech contributes to more effective use of inputs on farm and reduces food wastage n There is a growing global investor community. The report says global venture capital inflows into AgTech were up threefold in 2015, with the global opportunity for AgTech’s impact in the private sector as high as US$189 billion between 2013 and 2022. StartupAUS CEO Alex McCauley says this is the first vertical market report that his organisation has produced. “We are trying to identify areas where Australia can make a difference. Many people don’t associate agriculture

with technology, but it is one area where Australia potentially has a great competitive advantage. “And agriculture is a key driver of Australian exports. Technology has always played an important role in increasing agricultural output. We have an extremely valuable opportunity here to develop technologies that make a real difference to the economy’s bottom line, while also helping rural Australia realise the economic benefits of the digital technology revolution.” The idea that Australia can become a supplier of quality food to Asia’s emerging middle classes is taking hold in Australia’s agricultural industry, and there is an increasing discussion about how best to realise this potential. The report makes a number of recommendations, including: n Establish an independently-administered fund designed to make AgTech more affordable to industry n Develop a marketplace for AgTech products n Establish a network of AgTech hubs

Australia’s state governments are all keen supporters of agricultural innovation. Their initiatives include:

n Establish a joint R&D fund with leading global AgTech players n Develop a national AgTech strategy n Provide direction to university and research bodies centred on the

commercialisation of technology and shorter grant periods that encourage agile testing. More than half Australia’s food is exported. Export earnings from farm commodities will be around $43.4 billion in 2016, with agriculture comprising 15 per cent of all merchandise exports. But Australia’s agricultural productivity growth, once around 2.9 per cent per annually, has fallen back to 1.4 per cent in the last decade, below the global average of 1.7 per cent. AgTech is a way of redressing the balance, says the report. “AgTech has the potential to be a leading source of technological manufacturing, exporting high tech products to a global agricultural market in need of innovative solutions to meet exploding demand for food.”

spotlight forum on agricultural technology. The government, in partnership with CSIRO, James Cook University and QUT, has also developed a ‘digital homestead’ near Townsville to evaluate and demonstrate technologies that enable better decision making on farms, leading to improved productivity

NEW SOUTH WALES

and profitability.

The Department of Primary Industries (DPI) is working with various industry and academic partners to develop products

SOUTH AUSTRALIA

including livestock management in sheep, aerial drones, decision

The state government is funding agricultural research, including

support tools via smartphone apps and satellite based irrigation

a project looking at the benefits of sensors and web-based and

management systems.

wireless technologies in reducing grain crop loss and improving

The DPI is also working with the University of NSW, US

biosecurity issues. The eChallenge AgriFood and Wine program

technology giant Cisco, CSIRO IT hub Data 61 and NSW Farmers to

enables agricultural innovators to test their ideas, with access to

develop Innovation Central Sydney (ICS), a connected community

funding and investment.

focused on cloud, analytics, cybersecurity and Internet of

AgInsight South Australia is a data portal, available in six

Everything (IoT) platforms for agriculture. The DPI and Charles Sturt

languages, to help domestic and international investors identify

University in Wagga Wagga also operate the Graham Centre for

business opportunities in local agriculture. It received the

Agricultural Innovation to support partnership between all groups.

2016 South Australian Premier’s Award for public sector digital innovation and the 2016 Australian Government ICT Award for

VICTORIA

geospatial excellence.

Agriculture Victoria Services, a government owned company established to provide a commercial interface between

WESTERN AUSTRALIA

government and the agricultural industry and to commercialise

The government’s Royalties for Regions program has funded

government-funded research, is working on a number of projects

agricultural technologies, including electronic flock management,

including livestock tag and trace and a pasture reader.

a web portal to share value chain data across the sheep industry

Regional Development Victoria (RDV) and Food Source Victoria

and the eConnected Grainbelt project, which is aimed at

are encouraging agribusinesses to work together to drive growth

improving profitability and connects all parties and information to

in exports and jobs. A state government Horticulture Innovation

support growers.

Fund offers R&D grants of up to $50,000 for the sector to adopt new technologies, improve productivity and increase innovation.

TASMANIA Sense-T applies data from sensor networks to provide shared

QUEENSLAND

data analysis and research for better decision making, improved

The state government has established a $4 million technology

productivity and sustainability. Developed in partnership with the

commercialisation fund aimed at attracting private sector capital

University of Tasmania, CSIRO and the Tasmanian government,

into agricultural R&D. In April 2016 the inaugural Advance

Sense-T has been widely applied to agriculture and aquaculture.

Queensland Innovation and Investment Summit included a

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FIAL–innovation in Australia’s food value chain In less than three years, Food Innovation Australia Ltd has revolutionised the way Australian food and agribusinesses look at innovation, from paddock to plate. GRAEME PHILI PSON talks to Chairman Peter Schutz.

wave of innovation is sweeping Australia. In October 2014, the federal government released a major statement on science and innovation, identifying the industry sectors best placed to drive innovation in Australia. The food and agribusiness industry was named as one of them, and Food Innovation Australia Ltd (FIAL) earned the privilege to lead the Food and Agribusiness Growth Centre. Founded in 2013 with bipartisan political support, FIAL is a not-for-profit company with an independent board and chair. It is based in Melbourne with a satellite office in Sydney, to implement Australia’s Food and Agribusiness Growth Centre. The Industry Growth Centres Initiative was established in 2014 to drive innovation, productivity and competitiveness in six key industry sectors – food and agribusiness, cyber security, energy, medical technology, mining and advanced manufacturing – by focusing on areas of competitive strength and strategic priority. Chairman of FIAL is Peter Schutz, who is also the chair and president of the Australian Institute of Food Science and Technology. Mr Schutz was formerly head of technology at major food processor George Weston Foods, and earlier in his career was a master brewer at Tooth. “FIAL is led by the industry,” he explains. “We take a collective approach to ensure productivity, profitability and resilience in the food and agribusiness sector. We are a facilitation service between industry needs, R&D, education and training and government.” Mr Schutz says that in many cases industry doesn’t necessarily know what its needs are. “We help them identify those needs, and develop ways to meet them.” Membership of FIAL is open to any organisation in the industry. There is no fee – it operates on a pay-for-service basis. Much of the knowledge created through FIAL’s interactions with industry and markets is available at no cost, with fees payable only when accessing the various value added services. AN AGENT OF CHANGE FOR THE INDUSTRY FIAL’s focus is on creating new opportunities for Australian food and agribusiness companies in niche and targeted markets overseas. They do this not only through research and innovations that benefit these companies, but also by

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building the capability and resilience of the Australian food and agribusiness industry. With a national, holistic approach that integrates both cultural and business transformation, FIAL has quickly become a unique agent of change in the Australian food and agribusiness industry. “By working together with the research community, industry and government, we have the opportunity to create an environment that encourages risk taking and creativity,” says Mr Schutz. “We help create and translate market insight into new products and services to improve business viability and ultimately increase Australian employment, particularly in agriculture and value-added food processing. “We want to build a food and agribusiness industry that has the confidence and capacity for success, and where organisations have the resources, skilled workforce and associated capabilities to develop an innovative, cost-effective and efficient food and agribusiness industry.” One key FIAL initiative is the Export Market Insights (EMI) database, which was developed in collaboration with economic researchers at the Institute for Supply Chain and Logistics (ICSL) at Victoria University, as well as input from

exporting companies. The EMI database is designed to support exporters’ decisions, by giving them access to large amounts of information on specific international markets. It contains over 300 separate reports – one for each of 38 different food categories (by SITC code) for each of eight key Asian markets: China, Japan, South Korea, Vietnam, Hong Kong, Indonesia, Malaysia and Singapore. Individual reports – more detailed, tailored analyses of the import food demands by product and country – are also available at a small cost. Another example of FIAL’s innovation is the collaboration with CSIRO’s digital innovation division, Data61, which was formed in 2015 from the merger of National ICT Australia with CSIRO’s existing data analytics and digital research capabilities. “Data61 has extensive knowledge around big data analytics, so we can really look at megatrends within global food and agricultural markets,” says Mr Schutz. “It’s a critical area for FIAL – we use that data to analyse many different data sources, to be able to determine trends and identify opportunities for all our stakeholders.” The ability to identify – and more importantly, act upon – global megatrends is crucial for Australian food and agribusiness companies. It would enable them to target emerging markets, accommodate for increased or reduced demand and capitalise on changing tastes. Without this ability, the Australian producers run this risk of falling behind their international competitors. A TEN YEAR STRATEGY In late 2016 FIAL released a ten-year strategy for the food and agribusiness sector, called the Competitiveness Plan, based on consultation with all levels of governments, small and large companies, agribusinesses, food processors, R&D corporations and banks and financial institutions. The report is principally a document for the Australian government, which is using the strategy – and vision it outlines – to align its policies and programs in the food and agribusiness industry. “We now have a pretty clear view on what the industry needs and what the industry looks like,” says Mr Schutz. “Agriculture is an important portfolio within government, but so is education, and so is trade, and so are many other areas that affect the success of the agricultural industry. They all impinge and cross over what we do. The strategy involved inputs from all those sectors.” FIAL has identified that there are approximately 180,000 companies involved in the food and agribusiness sector. But about two thirds of these are non-employing family-run farms or trust companies. Many of these are either in agriculture primarily for the lifestyle, not especially interested in export or

outsource their production along the supply chain. The large majority of the remaining 60,000 companies are small- to medium-sized businesses, and most of these are often risk averse and happy to carry on with business as usual – Mr Schutz terms them “businesses of today”. “They are not as connected with their end market nor consumers, and view a direct interest or involvement in overseas markets as outside their ‘need to know’ area,” says Mr Schutz. “As a result, they rely heavily upon the downstream processors or exporters to manage access to supply chains and markets.” Of these 60,000 companies, only five per cent concentrate on markets and growing their business – “businesses of tomorrow”. “Those companies are the real risk takers and innovators, the ones that really understand export,” says Mr Schutz. “They understand the consumer and the supply chain. It is the market pull and not market push.” FIAL’s focus, however, is on the companies that fit neither description. “We are looking to transition five to ten per cent of the ‘businesses of today’ that have the desire to acquire the capabilities, capacity and confidence to grow into a ‘business of tomorrow’,” says Mr Schutz. “Effectively this means we want to double the number of businesses from 3000 to 6000.” INNOVATION FROM PADDOCK TO PLATE FIAL is supporting innovation across the whole value chain, from paddock to plate, in any sub-sector of the food and agribusiness industry – whether it relates to soil, genetics, animal health or crop growth. “We’re happy to be involved with any projects, including with research and development corporations like Meat and Livestock Australia, or Australian Pork, providing two things are in play,” says Mr Schutz. “One is that there’s innovation driving their activity, and the second is that the innovation is driven by a consumer or market need. That means market analysis. A lot of R&D in the Australian agribusiness sector is not driven from a consumer perspective – it’s all yield related. “Look at meat and livestock. How do you turn live cattle exports into value-added commodities with abattoirs, selection of breed and cuts from the market perspective? We want to identify the knowledge and research requirements of the industry, to find where the real research needs are within the Australian food and agribusiness industry. This will ensure that the research community are working on the real challenges of industry and not blue sky research with no tangible benefit for industry. “There’s also a big focus on eliminating red tape and making it easier to do business in Australia. We’ve got a role to identify it and reduce it for industry. ”

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06/INNOVATION IN AUSTRALIAN AGRIBUSINESS

A history of innovation in business, charity and research Baiada is a family-owned poultry business with a long and rich history tied to the western suburbs of Sydney. It is a progressive company – both in terms of research and development, the way the company and its staff give back to the community and the company’s embrace of its corporate social responsibility.

HUMBLE BEGINNINGS TO TODAY A privately-owned company based in Pendle Hill (30km west of the Sydney CBD), Baiada is best-known for its two iconic chicken brands: Steggles and Lilydale Free Range Chicken. The foundations of the company date back to the early 20th century when Celestino ‘Charlie’ Baiada immigrated to Sydney from Malta. Charlie was quite an entrepreneur – he bought a small parcel of land in 1928 and started supplying vegetables to Australian soldiers during World War Two. Soon after this business concluded, Charlie and his wife Giovanna began processing chickens in 1946. With the help of their teenage children, they processed 20-30 chickens per week in their family laundry. Chicken was still considered a ‘special occasion’ dish in Australia in the 1940s and 50s, but that mindset was changing quickly. The business moved out of the family home and into a new processing facility in 1960, supplying 10,000 chickens per week to city stores. By the time Charlie passed away at the age of 81 in 1983, Baiada employed 100 staff and had sales of $12 million annually. The Pendle Hill plant was processing 3.25 million chickens each year, and the company’s Tamworth plant was processing 2.5 million – both plants using the world’s most up-to-date

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automated equipment and systems. Charlie’s grandson, John Camilleri, took leadership of the company in 1984 and in the same year current CEO Simon Camilleri began full-time employment at the company. Under the new leadership, Baiada expanded as it acquired hatcheries, farms and breeding rights across the country. This growth saw Baiada become a known name in the Australian poultry industry in the 1990s, and its growth then further intensified with several company acquisitions. The most prominent was the acquisition of the Steggles brand in 2009 (via its parent company Barter Holdings). Today, Baiada’s share of the poultry meat market in Australia has grown significantly, a long way from its four per cent share in 1988. Baiada is proud of its two most visible brands – Steggles and Lilydale Free Range Chicken. The company’s ethos and dedication to excellence across its business means not only a better-quality chicken, but also higher standards of animal welfare. With strict biosecurity controls, CCTV monitoring of processing plants, advanced information management systems and dedicated animal welfare auditors, Baiada continues its commitment to all aspects of poultry production.

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PIONEERING INNOVATION IN THE LABORATORY Baiada’s innovative footprint can be seen in its pioneering research and development work, chiefly undertaken by the state-of-the-art Birling Avian Laboratory. The work at Birling – accredited to the highest standards by the National Association of Testing Authorities Australia (NATA) – focuses on ensuring Baiada continues to meet its high standards at all times. Birling works in collaboration with institutions such as the University of Sydney, the University of NSW, the University of Melbourne and the Elizabeth Macarthur Agricultural Institute. In 2015 alone, Baiada spent almost $1 million funding research and development through the laboratory. The facility has been integral to Baiada’s growth and its R&D investments will only increase into the future. Recent examples of the innovations produced at Birling include: creating an autogenous vaccine for salmonella, developing tests to detect viruses and methodologies to differentiate between viruses in poultry, developing tests for genetically-modified organisms and creating methods to screen out pathogens within 24 hours. “Using our hi-tech equipment, staff at Birling are leading the way in making processing more efficient and ensuring the highest standards of quality,” says Tony Pavic, Chief Scientific Officer at Birling. “To give an idea of the scope of improvements possible, staff can reduce processes that used to take 5-7 days down to roughly two minutes.”

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CONSCIENTIOUS ENVIRONMENTAL FOOTPRINT Baiada also utilises its considerable technological expertise to lessen the environmental footprint of its plants and facilities. The company’s Environmental and Sustainability Policy is formulated and overseen at the highest level within the executive, and an Environmental Management System has been implemented to ensure that 30 Baiada sites are now certified to AS/NZS/ ISO 14001 Standard - an internationally accepted standard for environmental management. In addition to this, Baiada uses water treatment systems and cogeneration power plants to provide its facilities with sustainable power. The company is currently in the process of introducing a range of new innovative energy generation measurers to its facilities. The company is also a signatory to the Australian Packaging Covenant, an initiative which encourages businesses to consider the environment by designing more sustainable packaging, increasing recycling rates and reducing litter from packaging. As part of the Covenant, Baiada has been able to increase the amount of recycled cardboard it uses in packaging and expand its recycling systems across its facilities. Baiada recognises the importance of reducing its environmental footprint as a facet of the company’s corporate social responsibility. It is not just a duty to the environment, but also a duty to Baiada’s customers and staff that the company operates sustainably and helps protect the environment for future

generations. GIVING BACK TO THE COMMUNITY For Baiada, innovation is not just limited to technology and research and development. As a family-owned company for three generations with close ties to the western suburbs of Sydney, giving back to the community is an important aspect of the business operation. The company’s innovativeness has proved equally significant in this aspect, with the development of the Baiada Charity Nest. Children’s charities take precedence at Baiada, and the company actively supports a number of charities primarily focused on children’s needs. To facilitate this, the Baiada Children’s Charity Nest was created, an innovative idea instigated by the business’ shareholders – largely the descendants of Charlie Baiada – to support a cause close to their hearts. The Charity Nest began on a small scale, with contributions made on behalf of the company pooled and then distributed to four charities that focus on the provision of healthcare needs for children: Working Wonders Children’s Health Foundation, Lifestart, Children’s Cancer Institute Australia and Telstra Childflight. Following on from these early stages, the Charity Nest was embraced by Baiada staff with an innovative salary sacrifice program. The core idea is that the Charity Nest is an excellent way for employees of Baiada – as well as the

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company itself – to contribute back to the community by making a difference to a child’s life. The charity fund is now jointly contributed to by staff and the company, with the total amount raised by employees matched by Baiada. Charity Nest awareness rose to new levels with Baiada’s sponsorship of the Sydney Roosters rugby league team in 2010 (as Steggles), with the establishment of a unique partnership known as the Steggles Roosters Charity Nest. This partnership involves four national charities and the Roosters Outreach charity sharing a pool of funds which is generated by the performance of the football team – for each margin point in a winning game, Steggles contributes $1,000, and the Roosters contributes $250. The 2013 season – in which the Sydney Roosters won the National Rugby League premiership – raised $530,000 for the Charity Nest. In the meantime, the support from Baiada’s employees has seen the Charity Nest grow to encompass ten charities across Australia, and has also led to the establishment of the Charity Champion program. Charity Champions – consisting of regular employees with a strong passion for charity – at each of Baiada’s eight processing sites are responsible for initiating local fundraising efforts. They also encourage staff to participate in fundraising activities and contribute to the Charity Nest through workplace giving. “The aim is to give back to the community on behalf of the staff as well as the company. Our employees raise money for charities from each region where there is a Baiada plant,” says Baiada Managing Director Simon Camilleri. “This is not just salary sacrifice but also staff contributing their time to events such as barbecues, barefoot bowls and other events that help to raise money. And every dollar raised by employees is matched by the company.” Baiada was very proud to announce the launch of its partnership with Ronald McDonald House Charities in 2011. The sponsorship involves the company not only providing funds from the Charity Nest, but also supplying food for every Ronald McDonald House kitchen across Australia. Up to $400,000 has

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been raised by Baiada to date, and the company’s staff are also very engaged in the partnership – making meals and delivering them to the families staying at the Ronald McDonald Houses on a rostered basis. Baiada also sponsors 42 sporting teams in its communities, and the majority of these are junior teams in regional areas. The intention behind this is to not only benefit the company’s staff, but also to strategically support the rural communities in which Baiada operates – areas like Beresfield, Tamworth and Hanwood in NSW; Mareeba and Ipswich in Queensland; Adelaide in South Australia; Laverton in Victoria; and Osborne Park in Western Australia. INNOVATION ACROSS THE SPECTRUM The company’s commitment to innovation is clearly seen across all aspects of its operations, from its charity work and community engagement to cutting-edge advancements in research and technology through the Birling Avian Laboratory. The industry-leading work undertaken at Birling strives to ensure a better product for Baiada’s customers, while also maintaining impeccably high biosecurity and traceability standards. The company’s commitment to reducing the environment footprint of its facilities and dedicated animal welfare management systems also plays a key role in maintaining its ethos. Overall, the Baiada picture is one of a family-owned company that is committed to not only providing the best possible poultry product, but also giving back to the community.

06/INNOVATION IN AUSTRALIAN AGRIBUSINESS

Passion and expertise combine to grow the perfect blueberry As Australia’s leading horticultural company, Costa leaves no stone unturned in their quest for perfection. One example of this is the company’s attention to detail in their blueberry supply chain, where their expertise and effort have combined to create a system that can be replicated all over the world.

127-year-old business based in Melbourne, Costa supplies fresh fruit and vegetables to major supermarket chains and independent grocers across Australia. They also export their produce to Asia, North America and Europe. Costa is a world leader in blueberry varietal improvement and grows approximately 50 per cent of Australia’s total blueberry supply, which is sold in Australia under the Driscoll’s brand. Costa has been growing blueberries in Australia for over 30 years and has a multi-decade research and development (R&D) partnership with the University of Florida. Working with researchers at the university, Costa has focused on breeding blueberry varieties that develop different attributes. They have trialled the cultivation of these new varieties in different climates and locations around Australia. The aim is to produce the perfect blueberry based on six factors: n Yield – optimising how many tonnes per hectare each variety can produce and how easily the berries can be picked n Taste or flavour – measured mainly by sweetness n Bloom – the shine and colour of the berry n Texture – the thickness of the berry’s skin n Size – some markets prefer medium-sized berries, while others (in particular Asian markets) prefer a larger berry Crop timing – distinguishing different growth and harvest times Costa has invested heavily in technology and R&D within all levels of the supply chain to refine their blueberries, and the company is rightly proud of their achievements. “We’ve developed our breeding and varietal selection over many, many years and tested against all the variables to achieve that perfect blueberry,” says Chief Executive Harry Debney. Most significantly – and unlike their competitors – Costa is able to offer a year-round supply of blueberries to their customers. They have achieved this by focusing not only on varietal development, but also on geographical site selection and storage technology. In Australia, the further north you grow blueberries, the earlier in the season they ripen. With sites across four states of Australia, Costa is able to maximise their production throughout the year. Paired with their technological advances in storage logistics, they are able to extend the production beyond the harvest season. Using modified atmosphere technology in their storage facilities, Costa is able to pick the berries at the end of the season and effectively extend their shelf life for up to six to eight weeks. Without compromising on taste or freshness, the berries can be brought to market at a time when the climatic conditions in Australia wouldn’t

otherwise allow blueberries to be grown and sold fresh. The company has built a state-of-the-art facility in the country’s southernmost state of Tasmania to utilise their modified atmosphere technology in the state with the latest blueberry season in Australia. The modified atmosphere technology enables Costa to sell blueberries in autumn, when they wouldn’t usually be available. “What that enables us to do is go to our customers and offer a 52-week end-to-end supply program, from one single vendor,” says Harry. “That can’t be achieved by any other Australian blueberry grower.” Domestic demand for Costa’s blueberries is so strong that the company is unable to export year-round. Asia – particularly Singapore – is the largest export market for Costa’s Australian-grown blueberries. More recently, the company has taken a novel approach to tap the Chinese market. Costa has exported their entire supply chain, selling Chinese-grown blueberries to the Chinese market. The blueberries are sold under the Driscoll’s brand, just like in Australia, with Costa replicating their Australian supply chain to make this possible. “We are establishing a production footprint in China by exporting our plant genetics, our growing expertise and post-harvest technology to another country in order to access new global markets,” says Harry. Costa’s Chinese journey has only just started – but with a similar arrangement already established in Morocco, it’s an exciting period for the company. Their innovative idea to export not only Australian produce, but Australian expertise, knowledge and growing methods is a brave move that will hopefully point the way forward for a range of Australian food producers.

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The innovative power of ideas Goodman Fielder holds an important place in the story of food in Australia and New Zealand. It has an impressive past, but is looking to the future. GRAEME PHILIPSO N looks at how it intends to get there.

oodman Fielder is one of the oldest and best known food producers in Australia and New Zealand. But many of its dozens of brands are even better known – Helga’s, MeadowLea, Praise and White Wings are staples on many Australian tables. The company is also well known for its high level of innovation – a legacy from its founding days over a century ago, when it introduced new ways of purifying flour. “The key to our success is making sure we always have fresh thinking coming into the business,” says CEO Scott Weitemeyer. “That gives us the ideas we need to develop new products.” Weitemeyer says that Goodman Fielder is in many ways representative of the whole Australian food business. “We have grown from a small business into a major global presence. We are now one of the biggest suppliers to supermarkets in Australia and New Zealand, with a presence on just about everybody’s dinner table. We also have a significant business across Asia Pacific. “But we are changing with the market. Look at the traditional sliced white sandwich bread – we have been evolving from that into other products, like artisan bread. We are now leading the market with a number of those options and turning artisan into an industry.” Goodman Fielder has expanded internationally around the region, but remains an iconic company in Australia and New Zealand. The company now has an annual turnover of over $2 billion, with 28 major brands and over 1,000 lines across Australia, New Zealand and Asia Pacific. THE EVOLUTION OF A FOOD PROCESSING GIANT Goodman Fielder began its life in 1909 in Tamworth in northern New South Wales, when baker George Fielder incorporated Geo Fielder & Co. to mill wheat. Fielder’s Flour was sold throughout New South Wales and Queensland. George Fielder was a great innovator. He produced Australia’s first dry

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gluten in 1933, which was the start of a vibrant starch and gluten industry. He moved into exporting and extended his growing range from starch to glucose, dextrose and into other cereal products, such as baked goods, pasta, packaged do-it-yourself products and stock foods. Geo Fielder & Co. became a public company in 1951. In 1978 it merged with Gillespie Bros Holdings Ltd to form Fielder Gillespie Ltd. Meanwhile, in New Zealand, a small bakery in Motueka (near Nelson at the top of the South Island) was expanding quickly. Patrick Goodman expanded the sale of his bakery’s products to local grocers in the area. His success led a number of grocers to invest in the business, and in 1968 it led a group of eight other bakers to form a cooperative called Quality Bakers. Quality Bakers joined with A.S. Paterson & Co, one of New Zealand’s top milling companies. In 1979 it was renamed the Goodman Group, and in 1986 it merged with Fielder in Australia to form Goodman Fielder Ltd, with the merged company becoming Australasia’s biggest food processor. In 1992 it acquired one of the most recognised brands in the Australian and New Zealand markets, Uncle Tobys. In 2003 Goodman Fielder Ltd was acquired by Burns, Philp & Company Ltd, and over the next three years Natures Over Limited (a New Zealand snacks business), La Famiglia Fine Foods Pty Limited (a frozen and chilled bread business in Australia) and Hansells snacks business in New Zealand were all acquired. In 2005 Goodman Fielder floated on the Australian and New Zealand stock exchanges, with Uncle Toby’s being sold to Nestlé. New Zealand Dairy Foods Holdings Ltd was also acquired that year. Goodman Fielder celebrated its centenary year in 2009, and the company moved to new corporate head office and research facilities in the Sydney suburb of North Ryde, and in Auckland. In March 2015, Goodman Fielder was acquired by two leading agribusiness and food companies in Asia; Wilmar International and First Pacific.

THE SEARCH FOR INNOVATION The Goodman Fielder of the 21st century continues to search for better ways of doing things. “When most people think of innovation they usually think of physical items, but we invest a lot in the power of ideas,” says Weitemeyer. “We are constantly innovating not only the way we develop products and technologies in response to the market, but also in terms of focusing on the ideas that will provide us with the foresight for the future. “Consumers are very good at telling us what they want now, but they’re not very good at telling us what they will want in the future. It’s important to have an innovation group to create a body of knowledge that enables us to anticipate the future and to develop intriguing ideas.” Managing this process is the key, says Weitemeyer. “If we can resist the temptation of turning every idea into a project, then we are managing ideas well. We select certain ideas, apply rigorous criteria through a process that we’ve developed that involves ideation and systematic thinking, then we come up with concepts, and from the concepts we develop projects.” Goodman Fielder works closely with Australasian universities and research centres. “Australia has one of the best food science and technology set-ups in the world, but most companies do not take advantage of that,” says Weitemeyer. “At Goodman Fielder we have created a collaborative innovation approach where we work with researchers and define the mutual benefits up front.

“That has created an environment where researchers can profit from their connection with the industry, and we can access their enormous amount of knowledge. Academics in Australia are becoming increasingly aware of the need to cooperate with industry, and I believe Goodman Fielder has had a lot to do with that. “Australia now is beginning to find its own research ethos. You see it with New South Innovation from UNSW, at UniQuest at the University of Queensland, at ANU Edge and at many New Zealand universities. It’s good for both sides. They are graduating people who are more adaptable to industrial reality, and we can also access their knowledge base in a much better way.” A recent example is Goodman Fielder’s development of a large range of advanced gluten-free products and a low-carbohydrate bread, while at the same time reducing the costs of production significantly. The same is true of margarine, where Goodman Fielder is a world leader. “Many of our products are staples, but others are quite unique and evolving with the times,” explains Weitemeyer. “We have a number of products in salad dressings and sauces, for example, which we evolve to respond quickly to changes in the marketplace and changing tastes. “We are a company that is very close to the Australian consumer, on a daily basis. We are there from breakfast to dinner. Our brands are very iconic, and Australian consumers know that we have one of the most sophisticated food industries in the world in terms of the quality and purity of our ingredients.”

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World-first Australian biopesticide to save global bee population The phenomenon of colony collapse disorder has devastated bee populations around the world, endangering the vast number of agricultural crops that are pollinated by bees. While the problem is not as pronounced in Australia as elsewhere, Australian company Innovate Ag has come up with a solution that benefits both the environment and farmers: Sero-X.

he origins of Innovate Ag go back to 2007, when the (since-disbanded) Cotton Catchment Communities Cooperative Research Centre (CRC) had a project that was looking at the exceptional pest control properties of Clitoria ternatea – more commonly known in Australia as the butterfly pea. Wee Waa-based pest management company Growth Agriculture was the commercial partner of the project, which aimed to determine if a commercially viable product could be made out of the plant. At the conclusion of the project in 2010, Growth Agriculture decided to buy the intellectual property rights to the product from the CRC, and formed Innovate Ag with a 50 per cent ownership split between Growth Agriculture and a private investor. Thus, Innovate Ag was born to handle the registration and commercialisation of what soon became Sero-X. THE POLLINATION PROBLEM An estimated 5-8 per cent of the food consumed by humans – from most fruit and vegetables to many nuts and seeds – relies on bees to pollinate the plant. Yet over the last two decades, there have been huge decreases in bee populations across the world, particularly in North America and Europe. American beekeepers have reported losses of an average of 30 per cent of bees annually in the last decade, and some sources believe there has been a 90 per cent total decline in pollinator populations over the last two decades. While there are many possible causes of this decline, an important one has been the use of chemicals and pesticides by farmers on flowering crops. The use of neonicotinoids in particular, a modern class of insecticides, can weaken the resistance of bees to pests and viruses. Many scientific studies have concluded that neonicotinoids play a role in colony collapse disorder, where otherwise healthy bee hives are completely abandoned. In 2013, the European Union placed a moratorium on the use of three types of neonicotinoids of flowering crops in an effort to limit the damage to pollinator populations. For farmers, it is a complex problem. Crops need to be protected from damaging insect pests, but many still rely on bees and other pollinators for survival. Completely abolishing pesticide or insecticide use might be an op-

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tion for some, as might more expensive and targeted methods of eliminating pests. But for most farmers, there is a real need for a cost-effective and safe way to protect their crops and ensure their commercial viability. DEVELOPING A SCIENTIFIC SOLUTION About 15 years ago, the butterfly pea – native to Asia but introduced to Australia – was trialled as a refuge crop in a genetically-modified cotton plantation in New South Wales. The idea of the refuge crop was to allow a breeding and feeding ground for insects to ensure that resistance to the genetic modification was not developed. However, insects would not go near the butterfly pea, essentially rendering it useless as a refuge crop.

Dr Robert Mensah, principal research scientist at the NSW Department of Primary Industries, noticed this and started doing crude extracts and tests to determine how insects reacted to the plant. He discovered that a large number of insect pests were either directly killed or repelled by the plant, yet it had no effect on bees and other pollinators. As a result, the project at the Cotton Catchment Communities CRC was established with a view to developing a

commercially viable product from the plant. The CRC’s project was successful in developing a prototype product, but it was research at the University of Queensland’s Institute of Molecular Biology that showed the active compound in the butterfly pea that was toxic to pests was the plant’s cyclic peptides. The peptides in the butterfly pea are produced by the plant to protect itself against insects that are known to eat it. These peptides have no impact on insects that don’t feed on plant material, such as pollinators, or predatory insects that are considered beneficial, such as spiders. “Why this is so ground-breaking is that all other pesticides in the market have chemically-synthesised, relatively small compounds that have unintended non-target effect,” says Nick Watts, Project Director at Innovate Ag. “The peptides in the butterfly pea have evolved and been designed to only have an impact against insects that feed on plant material.” The peptides are also non-systemic, meaning they don’t persist in the natural environment. They break down into amino acids over a comparatively short time period and eventually become plant food, leaving no residual side effects. Knowing the active compounds of the butterfly pea, Innovate Ag is able to extract the peptides from the plant, stabilise them in a solution and formulate a liquid spray. The result is Sero-X, made commercially available in 2017 as the world’s first peptide-based pesticide. It is the level of scientific research that went into Sero-X that gives the product a level of credibility well beyond that of many other non-chemical pesticide and insecticide products. “It is a perfect pesticide, as it kills or controls insects that will harm the plant but does nothing to other insects,” says Nick. “It’s the safest and least-damaging to non-target species of any insecticide on the market.” For the average farmer, Sero-X offers an efficient solution in the battle

against pests and harmful insects, one that is backed by scientific study and undoubtedly benefits both the environment and bee populations. “We can explain why it works, which is hugely important and gives us credibility – we can talk to farmers and guarantee them that each time they buy a drum of Sero-X and use it correctly, it’ll perform the same way,” says Nick. “It took it out of the realm of herbal medicines or natural preventions and into a more traditional pesticide language.” MAKING A GLOBAL CHANGE Currently available for use in cotton and macadamia farms, the plan is to extend Sero-X into a much wider range of crops and horticultural outfits in the next few years. And with the Belgian-based company Biological Products of Agriculture (Bi-PA) securing the rights to distribute Sero-X to the North American and European markets, the future is bright for Sero-X and Innovate Ag. The product will still be manufactured in Goondiwindi in Queensland, but distributed around the world to aid in the fight to save bee populations. And according to Nick, this is just the first step in a peptide-based revolution in the pesticide and insecticide industry. “Sero-X is the first of an untold number of peptide-based solutions that will specifically target plant-eating insects and have no unintended side effects,” says Nick. “We think we’re the start of that process – a world first that will kick-start a complete change in the way we control pests.” With Sero-X, farmers can efficiently control pests and harmful insects without causing damage to crucial pollinators such as bees. It’s a small start, but it may prove to be the first and most crucial step in the fight against colony collapse disorder and declining bee populations worldwide – all from a small company in rural Australia.

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High points of Australian innovation

1854 1843

GRAIN STRIPPER A harvester that strips grain from their stalks, the grain stripper was invented by John Ridley in 1843. The world’s first mechanical grain stripper, it facilitated the reaping process on the farm and reduced the number of labourers needed to harvest wheat crops as it was designed to be horse-drawn. Ridley’s invention consisted of a comb that lifted the wheat heads, which were then removed by rotating beaters situated behind the comb. The heads went directly into a storage box located at the back of the machine. The stripper was ideally suited to Australia’s dry and hot conditions, and it also ensured the wheat was kept dry, which meant that it arrived in excellent condition at overseas destinations. Unfortunately there has been ongoing argument over who the original inventor of the grain stripper is – some assume it was a farmer, John Wrathall Bull, while others believe it was John Ridley. Despite the debate, Ridley is generally credited as the inventor of the grain stripper, with his name highly commemorated in South Australia.

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REFRIGERATION James Harrison was a Scottish-born journalist and inventor, who made significant advancements to refrigeration systems in the mid-1800s. With his keen eye for detail, Harrison noticed that sulphuric ether fluid, which was used to clean the printing type, left the type freezing cold as it evaporated. He applied this cooling effect of evaporation to his experiments on refrigerators and was granted a local patent in 1854. In 1855, with a well-working refrigeration machine, Harrison was producing several tonnes of ice a day from Geelong’s Barwon River. Harrison brought his invention to London for commercial development by engineering firm Siebe & Co, and after having his process and apparatus patented, the first Harrison-Siebe refrigeration machine was sold to a brewery in 1857. Harrison’s most noteworthy invention was pioneering work on the refrigeration of ships. Harrison proved (at the Melbourne Exhibition in 1873) that when meat was kept frozen for months and maintained in a ‘cold bank’, it remained perfectly edible. This meant that meat could potentially be shipped from Australia to England at a more efficient rate. While an experimental beef shipment to England failed, Harrison’s work laid down the foundations for future successful refrigeration systems on ships. For more information on Harrison, see pages 200-201.

1877 STUMP JUMP PLOUGH The first stump jump plough, called ‘Vixen’, was patented in 1877 by Richard Bowyer Smith. Smith drew inspiration for his invention when a bolt on his plough broke while he was digging rough and stumpy ground. He noticed that despite the plough losing the bolt, it continued to work efficiently, riding easily over rocks and roots. With the help of his brother Clarence Smith, Richard developed a prototype in 1876, and the result was the first three-furrow plough. The machine was first exhibited at the Moonta Agricultural Show in 1876, winning first prize (Clarence later refined the machine to make a single plough, which also garnered attention at the show). The stump jump plough eliminated the backbreaking task of cleaning land filled with stumps and stones manually, and also allowed mallee land in South Australia, Victoria and New South Wales to be cultivated more efficiently.

1910 DETHRIDGE WHEEL John Dethridge, a water supply engineer and former commissioner of the Victorian State Rivers and Water Supply Commission, invented the Dethridge wheel in 1910. Still used to this day, the wheel was created to measure the volume of water flowing past it in a channel. The wheel played a crucial role during the development of irrigation districts surrounding the Murray Darling Basin. Monitored by the government, farmers that worked the land along the rivers were only allowed to extract a specific amount of water for their crops. As these irrigated farms began to multiply, the wheel was used to ensure that the irrigated water was distributed equally and also provided the basis upon which the farmers were charged for the limited resource. There are tens of thousands of Dethridge wheels in operation in Australia, and they are widely used in irrigation districts in Victoria, Queensland and New South Wales.

1877 MECHANICAL SHEARING CLIPPERS Frederick York Wolseley was the first person in Australia to manufacture commercial mechanical shearing clippers. An immigrant from Dublin, he owned sheep stations in New South Wales where he began experimenting with a sheep-shearing machine. While he wasn’t the first person to create mechanical shearing clippers, Wolseley’s own research and development saw him adapt an existing working model that succeeded in shearing part of a sheep, and he was granted a patent in 1877 for a shearing device that was driven by horse power. In 1885, Wolseley bought the rights of a horse-clipper invented by John Howard, and hired Howard as a mechanic. Together, Howard and Wolseley made several improvements to make the horse clippers effective for sheep shearing. Upon realising how valuable the equipment was, Wolseley formed a manufacturing company to produce it commercially. The Wolseley Sheep-Shearing Machine Company was established in Sydney in 1887, and Wolseley ensured that his company was prominent at agricultural shows. There was no better advertisement for Wolseley’s clippers than when John Howe, who was a well-known shearer in Queensland, set a record in 1892 for shearing 237 sheep in one day using the mechanical handpiece.

1914 SUNSHINE HEADER HARVESTER Headlie Taylor invented the sunshine header harvester in 1914. Building the machine with the help of Ralph Garth, Taylor’s idea for the invention came from simple common sense. It was a remarkable improvement from the stripper harvester, which was invented by Hugh McKay in the 1880s, as the sunshine header harvester was able to cut the wheat heads rather than beat or pull them off. More efficient and compact than McKay’s invention, Taylor’s machine soon replaced the massive assembly lines of stripper harvesters that were being manufactured in Victoria. Its huge harvest capacity aided the bulk handling of wheat throughout Australia.

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1965 1923 ROTAVATOR ROTARY HOE A teenager from Gilgandra, a town in the Central West region of New South Wales, Arthur Clifford Howard invented the first self-propelled rotary hoe used for farming. At just 16 years of age, Howard came up with the idea to make hoeing more efficient – in 1912, gathering different pieces from farm machinery, he fixed several blades to a powered axle so that they would rotate and dig the earth while pulling forward at the same time. This meant that the farmer would simply have to walk behind the machine and steer it using bicycle-type handles. Refining his design, Howard later developed an L-shaped blade that was mounted on widely spaced flanges connected to a small rotor – this stopped the soil from being thrown sideways, as was the case with his original design. The rotary hoe revolutionised the way small farms were cultivated and at its peak, Howard’s company exported more than 100,000 rotavators to 120 countries in 1970.

WINE CASK In 1965, South Australian winemaker Tom Agove filed a patent for a simple wine container. It was essentially a plastic bag holding a gallon of liquid packed inside a cardboard box – hence why it is also known as a bag-in-a-box. The original cask design required the consumer to open the box, take the bag out, snip off a corner, pour the wine and seal the bag with a paperclip. Two years later, Penfolds Wines and Geelong inventor Charles Malpas developed a plastic flow-tap that could be attached to a metallised plastic bag. It allowed the bag of wine to stay in the box and be tapped like a traditional wine barrel – stopping air from getting in and spoiling the wine. While Agove’s initial design may have seemed too troublesome to handle, the simple invention dramatically changed the way Australians drank wine forever – so much so that during the 1980s and 1990s, almost two out of every three glasses of wine consumed in Australia came out of a wine cask.

1972 1961 TOFT CANE HARVESTER The Toft Brothers introduced the first commercially successful mechanical sugarcane harvester in the early 1960s in Bundaberg, Queensland. In 1939, Joseph Toft built a simple mechanical cane loader, which he then modified the following year with the help of his brother Harold Toft, using parts from a T-model Ford motorcar. This became the first commercial whole-stalk cane loader in Australia and though it took three people to operate the machine, it was a vast improvement from manual loading. In 1956, Harold Toft and his brother Colin further developed the machine, producing a hydraulic-operated cane loader with rotatable grab that only needed a single person to operate. Three years later, they developed a simple singlerow harvester, which became a forerunner of numerous cane harvester models. The cane harvester was so productive that by 1979, the entire country’s sugarcane crop was being cut by machine instead of using manual labour.

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DYNAMIC LIFTER FERTILISER In the early 1960s, a chicken farmer based in Sydney realised that chicken manure could be used as organic fertiliser. Seizing the potential in 1969, Norm Jennings began redesigning birds’ drinking trays to stop water from splashing onto the ground, keeping the droppings as dry as possible. Combining his ingenuity with his engineering skills, he developed machines that could cure and sterilise the droppings and turn them into pellets. A fertiliser that was easy to package, transport and use, Dynamic Lifter quickly became an international success. The company negotiated agreements with numerous poultry farmers – in exchange for chicken droppings, the company installed its patented equipment in the farm’s sheds. Farmers mutually benefited from the agreement as the company’s drinking system kept the manure dry and eliminated pollution and blowfly problems. In 1970, the company held successful field trials for its fertiliser and Dynamic Lifter began selling in bulk to farmers and orchardists. Ten years later, it was stocked in supermarkets and plant nurseries to cater to home gardeners. Dynamic Lifter is exported from Australian factories to locations all over the world, including Asia, Europe and the Middle East.

1974 PERMACULTURE Permaculture is a portmanteau for permanent agriculture and permanent culture – a term that integrates the environment, resources and people through mutually beneficial synergies. It is a philosophy and practical technique to produce food and use energy sustainably, using a design that works with the natural ecosystem rather than against it. The term was coined by Bill Mollison, a professor from Tasmania. Together with David Holmgren, Mollison developed a framework for sustainable agriculture in 1974 at the University of Tasmania. The design system applies new approaches to agriculture, architecture, infrastructure and energy use, creating socially, economically and ecologically sustainable settlements in both rural and metropolitan settings. Five years later, Mollison established The Permaculture Institute, which was dedicated to teaching the practical design of sustainable soil, water, plant, legal and economic systems. By the end of the century, 250,000 people from more than 120 countries had been trained as designers under Mollison’s framework, with over 4,000 permaculture projects underway at any given time. In 1981, Mollison received the Right Livelihood Award (also known as the ‘Alternative Nobel Prize’) for his contributions in environmental design.

1991 BUFFALO FLY TRAP Clean, green and pesticide-free, the buffalo fly trap was invented by CSIRO scientists Bob Sutherst and Bob Tozer in 1991. A serious problem for dairy cattle in tropical and subtropical parts of Australia, buffalo flies not only cause skin irritation but can also affect milk production. The trap consists of a translucent plastic tent with a dark inner tunnel lined with brushes. Working similarly to a car wash, cows walk through the trap to brush the flies off. The conical shape of the tent encourages the flies to naturally head upwards towards the light, where they are trapped in a false ceiling and die from desiccation. The buffalo fly trap was commercialised in 1992 and is still widely in use, with designs for the trap demonstrated online by the Queensland Department of Agriculture and Fisheries.

2008 TANK BRED TUNA A highly-prized product, especially in Japan, the southern Bluefin tuna has been fished close to extinction. In 2008, a breeding system designed by Australian company Clean Seas made history when they were able to get tuna to spawn in landlocked tanks. It was the first organisation in the world to create an artificial breeding program for southern Bluefin tuna. After years of research and development, the company designed a captive breeding system that works by fooling the tuna into thinking they are swimming out of the Australian Bight and into their breeding grounds. Located in South Australia’s Arno Bay, the breeding facility was a pioneering step for aquaculture and laid the foundations for future captive breeding programs around the world.

“Don’t overlook the immense knowledge base built over decades in our agribusiness and other key enterprise areas. The aim of government now is to leverage these opportunity sectors through quality partnerships, domestic or in-bound. We are funding the intelligent application of technology, R&D and innovation directly into these high growth areas. That is the active vision of the future rapidly evolving in NSW today.” The Hon. Stuart Ayres, New South Wales Minister for Trade, Tourism and Major Events and Minister for Sport

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The beef of Choice for Australia and Asia Australian Country Choice (ACC) is recognised as the largest vertically-integrated producer of beef in the world, dedicated to supplying its distinct customers with high-quality meat. With a 60-year history and significant recent growth, the company’s paddock to plate supply chain is unmatched by its competitors. ACC’s focus on customer requirements – both in Australia and abroad – ensures strong market demand and support for their products.

ounded by the Lee family nearly 60 years ago in Queensland, ACC has grown significantly in the last 20 years to become one of the world’s most successful beef production companies. Under the stewardship of current chairman Trevor Lee and fourth generation family members, this family owned and operated company has seen significant growth in all areas of its beef supply chain – from cattle breeding and growing to grain feeding, processing, packing and exporting. ACC runs cattle operations on 27 properties across rural Queensland, and

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is in fact the second-largest privately owned company in that state with 1250 employees and an annual turnover that exceeds $800 million. The company controls the third-largest beef cattle herd in Australia with around 270,000 head of cattle, and processes up to 80,000 tonnes of beef carcases each year – of which around three quarters are destined for Coles supermarkets and the remaining quarter exported to over 24 countries. Despite its size, the company’s most significant point of difference remains its fully-integrated supply chain that encompasses cattle breeding, cattle grow-

ing, grain-feeding, primary and further processing, export marketing and sales and distribution. Indeed, the company’s meat processing facility at Cannon Hill in the suburbs of Brisbane (which employs over 1000 people) is one of the only beef processing facilities in the world that can slaughter, bone, value add, retail ready pack and distribute under one roof, maintaining an unbroken cold chain. Control over every facet of the supply chain means ACC can ensure they are supplying consistently high-quality and verified safe meat products to consumers both domestically and internationally. Ensuring the safety of its meat products is of utmost importance to the company, as consumers all over the world are becoming increasingly concerned about food safety and the origins of their food supply. For ACC, this commitment to food safety goes further and encompasses animal welfare and sustainable farming practices in order to maintain its social licence. “In highly developed economies this concern extends further back into the supply chain and picks up on the elements of humane animal treatment, sustainable land management practices, fair work conditions, safe working environments and environmentally sustainable factory operations,” says ACC Managing Director David Foote. “Australian Country Choice was the first in the Australian beef industry to achieve international certifications along the supply chain, which gives us a unique capacity to provide verified solutions to these concerns along the full length of our supply chain and will continue to enhance our immediate point of difference to our competitors.” ACC has for many years maintained an industry leadership role across the full supply chain for innovation and technology uptake, from the use of IVF techniques and pain management in cattle breeding herds to clever retail packaging solutions. This extends to not only technology that improves production and efficiencies, but also innovations that focus on ethical and sustainable practices. Aside from its state-of-the-art processing facility at Cannon Hill, the company also has implemented sustainable vegetation, pasture and water management practices across its significant land holdings to underpin its environmental commitment.

Maintaining international certification is an important ingredient in developing the export side of ACC’s production, which remains a cornerstone of the business. Much of this export is to Asia, where ACC sells chilled and frozen beef primal cuts and offal products, fresh bovine origin pharmaceutical products and salted cattle hides in a closed supply chain. The company anticipates that the majority of its new business growth will come through export demand from new and existing customers, with Asia providing the bulk of this due to its proximity to Australia and growing market sophistication. The continent’s rising middle class population also provides opportunities to get ACC products in on the ground floor in developing markets. The fact that ACC’s processing and distribution facilities are in Brisbane minimises any logistics or timing issues, ensuring the products reach customers in an exceptional state. A key to ACC’s existing – and future – success in Asia is the effort undertaken in not only understanding the individual Asian markets better, but also in providing a point of difference in the product. “The company’s growth and success has come from its unique and customer centric proposition,” says David. “Within the export field this requires a clear understanding of the market dynamics and demographics, as no two are the same.” In the industry, it is important to recognise the different needs of Asian customers compared to Australian consumers. Different markets offer specific opportunities for different cuts of meat, and this is something ACC takes into account when identifying customers and distributing its products overseas. For example, while Australians are voracious consumers of steaks cut from rumps or rib fillets, Chinese consumers are not – instead, the beef brisket is a much more popular cut of beef in China. For ACC, this provides an opportunity to differentiate and utilise more of each carcase presented in a cost effective and consumer ready style. The company sees the Asian market as an opportunity to add value (in terms of demand) to different parts of the carcase, and will process and target its meat distribution points accordingly. To this end, the company has built strong relationships over many years with distributors and customers across many key Asian countries, and these relationships hold ACC in good stead when it comes to growing its market share. These relationships are also important in understanding ACC’s individual markets in Asia. The company actively maintains and develops their partnerships – including hosting supply chain visits, customer training and awareness visits from import customers – in order to enrich its knowledge of these markets and better respond to customer demand. As an example, in some markets ACC includes information on product origin, integrity, safety and handling instructions in the local language. “To better understand our customer requirements, we have facilitated and hosted supply chain visits over the years for our major import partners and their key customers including China, Taiwan, Korea, Japan, Indonesia, Thailand and the Philippines,” says David. “The feedback from these visits – both from the participants and the market – has confirmed that this ‘hands on’ strategy is a key to gaining competitive market access.” The emphasis in all these relationships is on trust and mutual benefit – without that, ACC’s export activity would not be as successful. Apart from nurturing these partnerships, ACC recognises it is equally important to not only gain but maintain the trust of its consumers – in Australia and internationally – by providing consistently high-quality and safe beef products year-round. The company’s efficient and sustainable paddock to plate supply chain, use of cutting-edge technology and adherence to consumer demand has made ACC one of the most successful beef producers – not only in Australia, but in the world.

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Breaking new ground in livestock information services The Agricultural Business Research Institute (ABRI) is breaking new ground in developing fully integrated, cloud-based information services for both farm and domestic animal industries.

uilding on more than 40 years of pioneering information services for agricultural livestock clients across the globe, ABRI is leveraging its unparalleled data systems capacity to develop solutions tailored to the specific needs of organisations in virtually any industry that manages animal information. The first of these new information systems developed by ABRI is the proprietary iCompete™ technology, a cloud-based system of recording and retrieving equine competition information. iCompete™ has recently been adopted by the Australian Quarter Horse Association (AQHA). It brings together what were disparate lists of members, horse and stock registrations, events, entries and competition results, association accounts and breeding information and combines them in an integrated information system. “The iCompete™ technology makes the entire organisation’s information accessible from one central database,” says ABRI Managing Director, Hugh Nivison. “It can include virtually any item of information an organisation wants.” “The Quarter Horse information system allows members to search for the specific information they need and to make links between different categories of information. They can see a horse’s performance at a glance, its national competition standings and the prizemoney it has won. “From there if, for instance, they are interested in selecting a sire, they can simply link a horse’s performance back to its breeding.” Other equine associations are expected to take up the iCompete™ technology in the near future. BREEDING VALUES ABRI grew out of the development of breeding information systems for beef cattle when computers first became available in the 1970s. Starting out with a team of three people based at the University of New England in Armidale, New South Wales, ABRI has grown to have a staff of more than 70, providing database and genetic analysis services in 14 countries. To date it has predominantly served the beef industry, where its best known services are BREEDPLAN, a genetic analysis system for the calculation of Estimated Breeding Values (EBVs), and integrated pedigree/ performance databases for breed associations. ABRI also provides national beef genetics extension and technical support services. In addition, ABRI holds 15 per cent of the Australian market for herd recording services for the dairy industry and provides world-leading breed

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registry services for a range of livestock industries including dairy, goat, horse, alpaca, sheep, elk and wildlife societies. “It is a unique organisation that has built a specialised expertise in information systems, with a particular focus on livestock-related industries,” says Nivison. “No other organisation provides such a comprehensive livestock information service anywhere in the world.” Aware that its potential new livestock client base among beef breed associations is limited, ABRI plans to leverage the capacity developed in beef breeding to other livestock sectors and to more countries. The company has recently partnered with CSIRO to develop the Livestock Information Platform (LIP), a cloud-based, multi-user, multifunction database service to assist organisations requiring greater flexibility and scale than they currently have for their data storage and analysis needs. “There is no reason why our systems cannot be adapted for domestic animals such as dogs, pigs and poultry and for other livestock industries in other countries,” says Nivison. “We’ve spent more than 40 years developing and perfecting our information systems technology for livestock. It’s recognised as the best in the world. “There is really no limit to the innovative customised solutions we can offer clients with animal information requirements.”

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Angus success driven by market premiums and producer innovation Angus has emerged over the past couple of decades to be the predominant beef cattle breed in temperate Australia, with increasing demand also in northern sub-tropical areas for use in crossbreeding and composite programs. D R PE TE R P ARNELL, CEO of Angus Australia, answers the question â&#x20AC;&#x153;What has been the recipe of success of Angus in Australia?â&#x20AC;?

While no formal industry statistics are available, conservative estimates indicate that at least 60 per cent of beef breeding females in the temperate Australian beef industry are mated to Angus bulls. Hence, the superior rates of genetic gain achieved by Angus bull breeders have a direct impact on a very large segment of the beef industry. It has been calculated that investments in genetic improvement by Angus breeders have resulted in rates of gain in overall value chain profitability which surpass those achieved in any other recorded beef population in the world, with an accumulated discounted value exceeding $AU3.4 billion. Angus Australia, the not-for-profit member-based innovation company that represents breeders of Angus and Angus-influenced cattle, contributes considerable annual investment in breed development initiatives. This

includes provision of recording and genetic evaluation services to Angus breeders, pedigree quality assurance, education and extension activities, youth development activities and the conduct of applied research projects. An important component of Angus Australiaâ&#x20AC;&#x2122;s business is its partnerships with other industry organisations and service providers to make R&D and genetic evaluation services available to its members. Members of Angus Australia are responsible for over 40 per cent of animals registered in the Australian beef seedstock sector, and account for 40-60 per cent of the performance records collected in the sector. The Angus Australia database contains over 1.8 million animals, of which over 1.25 million have comprehensive performance data contributing to a total of over 6.8 million records. Angus seedstock breeders have embraced developments in DNA-based genomics technologies, with over 20,000 animals with high-density genomic profiles represented on the Angus Australia database. Many more animals have DNA parentage verification data and/or genetic condition diagnostic test data recorded. The future is very positive for producers of high-quality food products, especially premium quality red meat. Due to their long history of embracing consumer and market requirements, application of technology and innovation, and through the assembly of a comprehensive genetic database, Angus breeders are well positioned to continue to contribute to industry and national prosperity through continuous improvement in production efficiency and product quality. TRENDS IN PROFIT INDEX ACHIEVED IN THE AUSTRALIAN ANGUS SEEDSTOCK POPULATION OVER TIME. (+3.5%/yr)

100 80 $ index value

he key driver of the growing prominence of Angus has been the sustained market demand (and associated price premiums) for Angus derived beef, particularly in the high value export markets. Angus cattle breeders have worked with the beef value chain to develop high-quality Angus beef brands that continue to achieve strong growth in domestic and export consumer demand. Angus cattle breeders have responded to market signals with the application of focused genetic improvement programs to boost carcase and meat quality attributes over time, while maintaining the long-recognised fertility and maternal attributes of the breed. The reputation of Australian Angus cattle is recognised throughout the world, with considerable demand for Angus breeding cattle over the last decade in export markets in China, Russia and Kazakhstan. The key drivers of the success of Angus: 1. Sustained market premium 2. Feedlot demand 3. Supply capability 4. Brand development and support 5. Culture of innovation among breeders 6. Ongoing genetic improvement 7. Leadership in research and development 8. Added value through cross-breeding 9. Live export demand 10. Strategically focused breed society

2010-2014 Av. $2.74/yr 2005-2009 Av. $2.30/yr

60 2000-2004 Av. $3.58/yr

40 1995-1999 Av. $2.68/yr

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Pork CRC – transforming an industry The CRC for High Integrity Austrian Pork (Pork CRC) supports research and training across the Australian pork industry and has enabled the industry to transition from stall to group housing for pregnant sows. DR R O GE R CA M P BE LL, CEO of the Pork CRC outlines the science behind the transformation.

ork CRC coordinates research and training for the industry using funds (some $40 million over eight years) provided by the Commonwealth government (50 per cent) and its academic and end user participants, who also provide in-kind support in the form of facilities and staff. Pork CRC has 13 essential participants including four universities and 28 other participants including five international organisations, the RSPCA and Woolworths. The model has proven extremely effective at bringing science and industry together, encouraging cooperation and the sharing of ideas between commercial enterprises and for enhancing the adoption of new information and technologies. Pork CRC invests in four areas. These are: 1. Reduced sow and piglet confinement 2. Heard health management – the judicious use of antibiotics 3. Improving the eating quality of Australian pork 4. Carbon conscious nutrient inputs and outputs – carbon reduction. Progress has been made by researchers across all programs, with the greatest industry impacts being achieved in Programs 1 and 3. Pork CRC researchers are working on vaccines for major respiratory and enteric diseases in Program 2, and we have seen the dramatic adoption of biogas capture and the use and global commercialisation of near-infrared spectroscopy (NIRS) calibrations in Program 4. Biogas capture from effluent ponds reduces greenhouse gas emissions by up to 64 per cent, while the NIRS calibrations marketed under AusScan enables the nutrient levels in grains and protein meals to be determined within minutes. Some 25 undergraduate students (honours), 30 postgraduates and four postdocs have been or are being supported by Pork CRC, and 19 are already employed in research and industry positions.

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within these constraints learn how to modify their behaviour to optimise their access to limited resources, in particular feed. Other researchers have shown that aggression at mixing can be reduced by using a pheromone administered by diffusers hung above the pen, or by the provision of specially formulated molasses-type blocks. The pheromone is one of the few strategies other than the provision of additional space that genuinely reduces aggression at mixing and early grouping. The block, however, probably has a bigger role in enriching the sow’s environment potentially throughout gestation. A student from the University of Adelaide also found that providing sows with hanging objects (ropes, discs and mats) had no significant effect on aggression at or after mixing, but induced play behaviour. This is an indicator of a positive affective state and rather than becoming bored with the materials, play behaviour by sows increased with time (see below). The research is ongoing and investigates in more detail the behaviour of pregnant sows in groups and the development of other indicators of welfare and wellbeing, with an emphasis on how the animal’s affective state can be enhanced. To date, science developed by Pork CRC has established the factors affecting the welfare of sows housed in groups, has reduced the confinement of sows by 75-82 per cent, enhanced the welfare of pregnant sows and differentiated the industry from its major competitors. The students trained in the area are now turning the knowledge and techniques developed with Pork CRC to other animal industries. EFFECTS OF ENRICHING THE SOW’S ENVIRONMENT WITH OBJECTS ABOVE THE PEN ON PLAY BEHAVIOUR AT AND AFTER MIXING. Percentage of time spent playing

All programs and projects contain interesting stories that detail excellence in science and industry impact, but the story behind the transformation of how sows are housed during pregnancy is probably the most intriguing. In 2010 the Australian pork industry decided to voluntarily phase out the practice of housing pregnant sows in individual stalls. Stalls were perceived as having welfare and wellbeing problems by society in general and the transition was encouraged by Australia’s major retailers. However, in the intervening period 80 per cent of producers have transitioned from housing sows in stalls to group housing. While for many the change did result in an initial decline in productivity, most producers now achieve similar or improved performance than previously. The change was supported by a huge investment in R&D and in the training of graduate and postgraduate students in the welfare needs of sows, especially during grouping. A particular focus was on how the grouping of sows could be improved while maintaining or improving performance. The science generated has been amazing and has contributed to research that is unsurpassed on a national scale, with considerable industry benefits. Australian scientists established that the major factors affecting aggression between sows (and which can therefore result in adverse welfare in the form of injury and stress) are the amount of space at grouping, the time after grouping and the experience of the sow and staff with group housing. But the interactions of sows during mixing and when housed in groups are far more subtle and quite fascinating. Researchers at the University of Melbourne and the University of Adelaide established that aggression and stress (based on cortisol levels) both decline when sows are given increased space at mixing, and that sows adapt to grouping and reduced space quite quickly. The latter occurs within days of mixing and certainly within the first week of mixing. Other researchers demonstrated that it was only the less-dominant sows which benefited from more space at mixing. Both outcomes suggest that welfare and efficiency of facility use can be maximised if sows are given more space for the first four to seven days after mixing. That space can be reduced thereafter without adverse effect on welfare or reproduction. We learned that sows change dominance over time and between parities, suggesting they are well aware of their environment and how they might influence and be influenced by other animals in their group. They are driven to establish, or at least know, their position in the hierarchy of the group and

1 0.8 0.6 0.4 0.2 0 0

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AEGIC drives Australia’s grain export forward Australian grain has long been highly-valued across the world for its versatility, flexibility, reliability and functionality for a wide variety of food products. Nowhere in the world is Australian grain more appreciated than Asia – in fact, Australia’s top five wheat customers are all Asian countries (Indonesia, Vietnam, China, Japan and Malaysia).

he importance of Australian grain to Asia can be summed up with this remarkable little-known fact: well over one-third of Australia’s wheat exports end up as Asian noodles! But it’s not just noodles – as Asian diets increasingly incorporate Western-style products, Australian grain is ever-more in demand for baking, steamed products, pasta, pastries, cakes and cookies. As Australia’s foremost grains research, development and market intelligence organisation, the Australian Export Grains Innovation Centre (AEGIC) is committed to working with Australia’s grain customers and end-users in Asia to ensure the Australian grains industry understands, and can consistently meet, their requirements. Wheat is Australia’s largest crop, but AEGIC also conducts significant work around other grains, including barley, oats, canola and pulses. So what does AEGIC do? In a nutshell, AEGIC is a not-for-profit organisation that exists to increase value in the Australian grains industry. AEGIC’s offices, strategically located along Australia’s grain belt in Perth and Sydney, are staffed by highly-qualified and experienced scientists and industry experts, all committed to increasing the use of Australian grains across Asia through cutting-edge market research and innovation. AEGIC administers a diverse range of projects, mainly focusing on Australia’s key grain markets in Asia. Broadly speaking, AEGIC works across these areas: MARKET INSIGHTS AEGIC’s grain market experts identify trends and opportunities for the industry through market intelligence gathering and in-depth economic analysis. This involves collaborating with processors and end-users to evaluate their use of Australian grain. AEGIC also has a dedicated team of economists who analyse world grain markets and Australia’s place in the world grain trade. MARKET ENGAGEMENT AEGIC specialists regularly travel to key markets to conduct seminars and workshops, which provide information on the quality, functionality and enduses of Australian grain. These events are designed to provide a hands-on demonstration of the capabilities of Australian wheat and are always very well received. AEGIC also seeks feedback on what end-users require from Australian grain. This information is then relayed to key players in the Australian grains industry, such as plant breeding companies, grain traders and bulk handlers.

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GRAINS INNOVATION AEGIC’s grains quality research programs aim to identify new and innovative uses for Australian grain through cutting-edge laboratory research. AEGIC has laboratory teams dedicated to research on bread and dough, noodles, oats, malting barley and more. ANALYTICAL SERVICES AEGIC also offers commercial grain testing services at its Perth and Sydney locations. AEGIC Sydney was formerly known as the Bread Research Institute (BRI) and has long been renowned for its skill and expertise in grain testing, fibre analysis, dough rheology and food science. The Sydney facility operates a pilot flour mill designed to provide commercial milling evaluation and industry training. This facility is used to demonstrate the optimum conditions for milling Australian wheat and to create flour samples suitable for factory trials. The pilot baking facility on the same site enables the simulation of industry conditions. AEGIC contributes to the Australian agriculture industry through its innovative research work. This includes market research, testing grains and developing new processing techniques in state-of-the-art laboratories. Their research work focuses on Australia’s most important and highest selling exported crops.

Beer continues to be very popular in many Asian countries. AEGIC actively works with maltsters and brewers in major beer markets such as China to better understand their requirements. AEGIC also operates one of Australia’s only pilot malting facilities – Pilot Malting Australia – which simulates the commercial malting process and can assist with Australia’s malt barley accreditation process.

AUSTRALIAN WHEAT As Australia’s most valuable and important export grain, wheat is naturally a key focus for AEGIC. Australia is the fourth largest wheat exporter in the world, contributing 15 per cent of the total world trade. Australian wheat is exported to more than 40 countries each year, mostly in Asia and the Middle East. Many of AEGIC’s projects are related to Australia’s wheat export trade. Strengthening Australia’s relationships with major wheat millers, bakers and processors in Australia’s most valued Asian markets is a key focus. AEGIC regularly conducts sensory noodle testing together with market research and laboratory work to improve Australia’s understanding of the different requirements for various types of wheat-based noodles across Asia. For example, AEGIC regularly hosts a visiting noodle expert from Japan to assist with the evaluation of new noodle wheat varieties. Other important noodle markets include China, Indonesia, Malaysia, Vietnam and others.

AUSTRALIAN OATS Oats are gaining popularity in China and other countries as a nutritious food. AEGIC is working towards increasing the competitiveness of Australian oats for export through cutting-edge scientific exploration, market research and engagement with major processors. AEGIC’s experts are actively working to identify new and innovative uses for oats in consumer products. PULSES AEGIC’s Sydney scientists were responsible for developing technology which led to the creation of nut-free “peanut” and chocolate spreads made from mung beans, instead of peanuts to create allergy safe options. The technology was sold to a commercial company and the nut-free spreads are now on sale in Australia and overseas. AEGIC also conducts research projects on other grains, including canola. For more information on AEGIC, please visit aegic.org.au. Through their meticulous market insights, industry training and innovative research, AEGIC continues to be the country’s leading expert on the development of Australian export grains. The organisation is leading the way for innovation that creates profit for Australian grain producers.

The appetite for bread and other baked products in Asia has been on the increase for some time now, and demand will continue to grow. The Australian Wheat for Asian Baking project managed by AEGIC aims to increase the volume and value of Australian wheat in the Asian bread sector. AEGIC regularly conducts technical baking workshops overseas with major millers and bakers to better understand the requirements of these markets and ensure customers know how to use Australian wheat to get the results they want. AUSTRALIAN BARLEY Along with wheat, barley is a key export grain for Australia, both for animal feed and for malting.

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Australian truffles for the global delicatessen Twenty years ago the first questions people asked about truffles were: “Do you mean chocolates or mushrooms?” or “Oh, do you mean those things that you use pigs to find?” This was when the whole of Australia consumed around 200kg of imported truffles per year as fresh or preserved products. In 1995, there were no truffles farmed in Australia.

ustralia is now the fourth largest producer of black truffles in the world after France, Spain and Italy with an estimated production in 2014 of eight tonnes. Now Australians consume one tonne of fresh locally grown black truffles annually, and informed consumers ask if the truffles are Perigord, Burgundy or Winter. The bulk of the production is exported to 30 countries where it is sought after and recognised for its consistent high quality. From one farm producing truffles in 1999, Australia now boasts 200 truffle farms, or truffières, across all states but the Northern Territory. How has this quantum shift come about and how does this augur for the future? Globally truffles have been portrayed as rare, mysterious, expensive and delicious; an image that is often framed by impressions of misty mornings and the excitement of the hunt. The reality is very different. Growers and consumers have a poor understanding of truffles: there is criminal involvement in marketing inoculated trees and substituted truffles, and poorly targeted/ ill-informed government support schemes offer tax breaks for truffière establishment and even as welfare programs for impoverished farmers. So it was in this setting in the late 1980s and early 1990s that both Australia and New Zealand were perfectly placed to shake off the more negative elements of the traditional truffle markets and take truffles in a new direction. The major challenge confronting the Australian truffle industry’s pioneers was the dearth of valid scientific information on growing and producing truffles. Many of the techniques of inoculation had to be developed almost from scratch, with the first truffière established in Tasmania in 1993. Since then,

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understanding of the biology and husbandry needs of truffles has increased – and latterly exponentially – as researchers in France, Spain and Italy have altruistically shared their evolving knowledge. Australian growers have assimilated this knowledge effectively and further developed the industry with the support of R&D grants from Rural Industries Research and Development Corporation. The research in Australia has facilitated the use of DNA technology to identify truffles and competing species, and to evaluate the success of host tree inoculation. This has been particularly important in driving the expansion of knowledge and techniques of trufficulture, giving Australian growers a leading edge in the production of this elite agricultural product. Currently there are 200 growers in Australia, several with more than 10,000 trees, several with over 3,000 trees and the balance between several hundred and 2,999 trees. Our largest truffière, located in Western Australia, has 38,000 trees. Whilst the first trees were planted and first truffles harvested in Tasmania, Western Australia has – with a similar number of trees planted – eclipsed the island state as the major producer, with a harvest estimated at around six of the total eight tonne harvested in 2014. Competition between the major producers is fierce in the export markets of Asia and Europe where Australian products, being six months out of phase with Northern Hemisphere production, are readily identified as a preferable alternative to processed and preserved truffles emanating from the traditional truffle growing countries of Europe. The majority of smaller growers are found on the east coast of Australia

where they principally serve the needs of the local consumers, restaurants and boutique domestic markets. With regard to the economic impact of truffle growing in this country, industry related tourism – including truffle hunts, special festivals and culinary events – has had a major effect and is expected to grow in significance as truffles are more actively marketed and their availability increases. The growth and success of the Australian industry has not gone un-noticed and has attracted the attention of competitors in China, South America and South Africa. With much basic technical information readily available and considerably more developed, these countries will have a head start on where the Australian industry began two decades ago. Australia needs therefore to capitalise and develop its market leading position over the next few years to secure and expand its preeminent position in international markets. At the same time, it will need to do this with increasing resistance to its growth by the traditional truffle growing countries of the EU. In the face of this impending competition, Australia’s ability to continue

to deliver superlative truffles to the markets of the world is dependent on the industry’s ability to set and maintain the highest of quality standards. This will be achieved by ensuring domestic standards support export standards, and that small and large growers work collaboratively in response to market demands. The Australian Truffle Growers Association is ideally placed to facilitate the management of strategic initiatives on behalf of all Australian growers. ABOUT THE AUTHOR: Dr Peter Stahle is the president of the Australian Truffle Growers Association. Since 1995, when he wrote the original economic evaluation of establishing the industry in Australia, Dr. Stahle has had an intimate and passionate interest in truffles and the development of the industry. He had a joint venture growing truffles in Japan, marketed truffles in Europe and Asia, and has established Australia’s largest white truffle (Tuber borchii) truffière that in March 2015 produced the first certified T. borchii.

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When the pressure is on Preshafruit is an innovative Australian fruit and vegetable juice company that shows what fresh thinking can do to an established industry. GRAEME PHILIPSO N talks to CEO Alastair McLachlan.

n the suburbs of Melbourne there is a remarkable food processing facility, unique in Australia. It uses ultra-high pressure to pasteurise fruit and vegetable juices without the normal heating process that destroys much of the flavour. The result is a high-quality juice remarkable for its freshness and taste. In a few years Preshafruit has grown into a $15 million plus company, based on its use of an innovative high pressure process (HPP) developed by Spanish company Hiperbaric. HPP is a cold pasteurisation technique employing pressure so high it totally destroys the bacteria, moulds and parasites present in all juices. But it leaves the juice itself – and its taste – intact. The result is a product with a long shelf life and a fresh taste far superior to that of juices pasteurised with conventional heat-based processes. Preshafruit also adds its own techniques to the mix, with intellectual property it keeps close to its chest. The pressure in the Hiperbaric machines reaches up to 600 MPa (megapascals), ten thousand times more than the atmosphere, and six times higher than that found in the bottom of the world’s deepest oceans. Preshafruit has the only 300 litre Hiperbaric press in Australia. And it recently purchased a second multi-million dollar machine to meet demand for its high quality juices. CEO Alastair McLachlan joined Preshafruit in 2010 when the company

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was recapitalised by an investment from Victoria’s Victor Smorgon Group. He quickly saw the company’s potential, with sales more than doubling that first year (from $1.5 million) and have grown by 30-40 per cent each year since, reaching $14 million last year. There is room for much more growth, says McLachlan. “We’ve done well, because the product is so good, but to grow profitably is a major challenge. We are in Australia’s major supermarkets, which was a lot of work, and our export markets are continuing to open up.” Preshafruit exports to the Middle East and Asia. “We’re not the cheapest, but we have seen how the market is starting to appreciate quality, especially in China. We are regarded as a luxury product there, where the middle and upper class want luxury. One time our sales dropped when a more expensive competitor came into the market. We raised our prices, and sales increased.” McLachlan recalls his first taste of Preshafruit’s trademark Granny Smith apple juice. “I was immediately struck by the fact that it was so clear. No commercial apple juice is like that, I thought. But that’s because they are usually heat pasteurised to 70 degrees Celsius, then cooled, which turns them yellow. “They taste to me like burnt rotten apples. They also often have ascorbic acid added to boost the vitamin C content and some even have additives to compensate for what’s been lost in the heating process. By contrast, our apple juice is clear and bright, with the amazing aroma and taste of fresh apples. When I took my first sip it was like I had bitten into a Granny Smith apple – crisp and delicious.” Preshafruit now makes many more juices, including the YOLO, Bruce and Urban Remedy ranges. More are planned, along with an export drive. “The Free Trade Agreements open up many opportunities for us,” says McLachlan. “We had 40 per cent duty on our products in some countries. The lower Australian dollar helps too.” But having the best product is not enough in itself. As Preshafruit shows, the other essential ingredients are innovation, drive and intelligent investment.

06/INNOVATION IN AUSTRALIAN AGRIBUSINESS

Innovating in the supply chain to export the best Between now and 2050, global demand for food is predicted to increase by 70 per cent as the world’s population rises from its present 7.25 billion people to around nine billion.

t the same time, the growing economic prosperity of Asia (particularly China) is resulting in a rapidly growing middle class with a demand for premium quality, safe, clean foods and nutritional supplements. As incomes increase across other developing economies, eating habits are also changing, resulting in a greater demand for higher prestige foods like dairy products, meat, seafood and health and nutrition products. The South Australian-based Beston Global Food Company was created in 2012 to meet the demands for verifiably Australian-grown products from these burgeoning markets. Unlike most exporters, Beston has developed a business model that separates it from being just another commodities provider. Instead, it has positioned itself as a specialised supplier of value-added, premium goods to discerning consumers. This direction has necessitated the development of a unique, integrated ‘closed loop’ supply chain, described by Chairman Dr Roger Sexton as a “three-legged-stool” business model. The first leg of the stool involves investing in premium South Australianowned dairies, farms and meat and seafood producers, selected because of their commitment to “clean and green” production and attention to quality. In doing so, Beston ensures control of the production of the high-quality raw materials it uses. The materials are then processed via the second leg of the business model, using Beston’s own manufacturing plants. These plants are managed to improve productivity through increased throughput, capacity utilisation and the use of new technologies and innovations. Owning and investing in these production sites helps guarantee quality and enables Beston to respond quickly to market opportunities as they arise. The third leg of the stool is the establishment of strategic distribution relationships in key markets, including China, South Korea, Japan and Malaysia. Securing distribution networks to end customers – including restaurants, hotels and supermarkets – has helped improve and ensure sales margins. Despite its relatively young status, Beston is rapidly expanding its portfolio, already providing seafood, meat and dairy products into China and other parts of Asia. One example is ei8h+, a naturally high alkaline water product sourced from the pristine underground limestone aquifer systems that surround Blue Lake in Mount Gambier. The water has a natural pH of 8, compared with most

The Oziris tracing system at work

spring waters that have a pH of below 7. Demonstrating provenance is such an important part of Beston’s practices that the company has implemented a unique, patented tracing system, Oziris, to allow customers to track and trace their purchases back to the point of origin – from farm to fork. “Food security is one of the major issues facing world markets,” says Dr Sexton. “More short cuts are being taken in production and more disreputable producers are entering the market. By providing a unique track-and-trace and anti-counterfeiting technology, we can provide our customers with peace of mind while protecting our own reputation.” The Oziris system is teamed with Brandlok anti-counterfeiting technology to ensure customers that the products they purchase are genuine. This combination is a world first in anti-counterfeit, track-and-trace technology, helping to fight the growing problem of food substitution and soothe customer concerns about food safety. By focusing on food safety, Beston hopes to utilise its technical capabilities to produce healthy food and beverage products that are beneficial to consumers of all ages, in all locations.

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The unsung refrigeration revolution In the late 19th century, an Australian newspaper publisher played a key role in the invention of the refrigeration process. James Harrison’s role in this invention – now used by billions of people worldwide – has been somewhat overlooked by history.

The Harrison refrigeration model on display at Museum Victoria - photograph by Jon Augier

magine, if you will, the 1873 Melbourne Exhibition: a bustling crowd curious about innovations in science, and behind the throng a rather serious but bright-eyed man. It was an age where keeping food edible for an extended period of time meant pickling or preserving, and thus greatly altering the food’s taste and nutrition. An unpleasant reality, but certainly nothing else at the time would have been imaginable (unless, of course, one could afford ice, a prohibitively expensive commodity at the time). Until the 1873 Expo, that is, when polymath James Harrison revealed his gold medal-win-

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ning proposal of freezing meat in onboard refrigerators, or “cold banks”, to enable shipping overseas. Though the Harrison refrigerator relied on a cooling method no longer in use, it heralded the entrance of society into the modern age of food innovation. Harrison’s inventiveness was fueled by an interest in advancing Australia economically. He figured that if he could somehow make the meat better able to withstand long ship voyages (“for any required period”, as Harrison himself put it) he would be able to overtake the US monopoly on shipping meat to the United Kingdom. Whether he meant to do so or not, Harrison also opened the door to making perishable foods more affordable and accessible to those living far from its source, sparking the start of the modern global agricultural economy. Harrison hadn’t set out in life with any of this in mind: born in Scotland in 1816, he trained as a printer before immigrating to Australia in 1837. In 1840 he started Geelong’s first newspaper, the Geelong Advertiser, and it was while working on this publication that he discovered that the ether he was using to clean his machines left behind a cold spot when it evaporated. After discovering a means of mechanically “reversing the ordinary evaporations process”, as The Engineer described in an article from 1861, Harrison patented the world’s first commercial ice machine in 1857. His invention was soon used in breweries, hotels, meat-packing houses and distilleries, first in London and then around the world. This sort of spirited and revolutionary innovation, though, was not given its due when it came to the endurance of Harrison’s reputation in Australia – or, arguably, in the rest of the world. Instead, refrigerator creation is credited to Harrison’s fellow Scotsman William Cullen for his 1748 model (though he

never adapted it for practical use) and American Oliver Evans, who adapted early research by Benjamin Franklin on evaporative cooling into the first refrigerator design (but without building a physical prototype). Though there’s certainly an element of multiple discovery here, the simultaneity of these experiments in refrigeration doesn’t change the fact that Harrison was a crucial part of the development of modern cooling techniques. “Just think of how refrigeration has changed the lives of people throughout the world,” writes Harrison historian and member of the now-defunct James Harrison Museum Committee Daryl McLure in an article on the matter. “Geelong has a pretty poor record when it comes to recognising its [lesser-known] innovators and heroes.” Though described as a “mechanical genius” by Harrison historian Dr Roy Lang in an article McLure wrote for The Scotsman, it is clear that there is a schism between Harrison’s importance and his recognition. McLure posits in the same article that the genius of Harrison’s work emerged from his “self-educated” background in printing. In addition to printing and editing, Harrison also was “a city councilor and legislator in the first colonial Parliament of what was eventually to become the State of Victoria” – certainly a range of accomplishments. “If his inventive genius had not obtruded he might have made himself strong financially through journalism,” said Lang. “All his spare time and

energy were gambled on his brainchild, refrigeration.” And yet it is only the refrigeration industry itself that seems to acknowledge Harrison’s innovativeness and worthwhile risk-taking, with the Australian Institute of Refrigeration, Air Conditioning and Heating presenting the James Harrison Medal annually since 1972. Harrison’s invention is still in use today, both in the home and industrially. For the most part, modern air conditioning units still use the vapour compression technique that Harrison developed in 1854 and patented in 1856. The technique itself uses a refrigerant – ether, alcohol or ammonia – and causes it to undergo a phase change like the evaporating printer cleaner had, resulting in a cold area. The difference is that the pump-operating modern vapour compression systems are not steam powered. In his lifetime Harrison seemed to flounder as an inventor, returning to journalism after a failed attempt at shipping frozen Australian meat to Britain. But over 120 years after Harrison’s death, vapour compression is still used in domestic and commercial refrigeration; food processing and cold storage; cooling of circuits and electronics; and medical, industrial, cryogenic and, yes, transport refrigeration. It’s impossible to imagine modern cuisine, let alone life, without the ability to keep food refrigerated and ourselves cool. It’s time for Australia to recognise Harrison as its own renaissance man.

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06/INNOVATION IN AUSTRALIAN AGRIBUSINESS

Using digital media to support innovation Aginnovators.org.au is an Australian web portal published by NSW Farmers, the peak industry representative body in the state of New South Wales, Australia. Launched in mid-2014, AgInnovators has grown to be a leading channel for communications and educational material about the future of agribusiness. DA V ID E Y R E – General Manager of Research & Innovation at NSW Farmers – talks about why the portal was created and its aims.

AgInnovators was created to help communicate the research and innovation activities of NSW Farmers and, as part of this, to provide a channel that covers the future of agribusiness in a positive and holistic way. We also wanted to help promote Australia as a leading provider of best-practice solutions to global agribusiness and the great work being done by our supporters and other innovation bodies. AgInnovators supporters include CSIRO, Data 61, Food Innovation Australia Ltd, universities and government departments with programs in the innovation space. CONVERGENT NEEDS AND SOLUTIONS A linking theme across Aginnovators content is that all branches of the industry, in every nation, share the same resource-constrained world and need to minimise inputs, optimise processes and provide better service. For example, the issues of increasing energy and water productivity, improving nutritional values, reducing wastage in supply chains and making better information available to consumers are common to farmers, fishers and other agribusiness practitioners everywhere in the world. Many of the innovation frontiers in agriculture are cross-sectoral, and involve digital technology and new collaborative models. In the future, for example, most primary producers in Australia (whether they operate broadacre or hi-tech indoor facilities) will be optimising production processes using sensor tech and automation, and supplying digital data along with physical goods to inform compliance, authentication and marketing processes. The benefits of bringing these technologies to farms and supply chains include reduced wastage, better understanding of environmental constraints, improved consumer visibility and choice and higher farm gate values as farmers reconnect with consumers via ecommerce. PREPARING FOR THE FUTURE Agribusiness is in a transformational phase which is both exciting and threatening to stakeholders. New technologies are being developed and applied at every point in the value chain disrupting conventional business models. At

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Source: CSIRO

the same time, global thinking is evolving about how agribusiness can and should produce food and fibre more sustainably as the world’s population grows towards a projected 9.6 billion by 2050. The social licence framework surrounding agribusiness is becoming more demanding as visibility and understanding of outcomes increases due to advances in remote sensing, machine learning, electronic traceability, nutritional science and so on. As a leader in best practice, Australia is well-placed to benefit from this trend. The ‘aginnovators’ we talk about – scientists, farmers, processors, marketers, digital entrepreneurs – are people who are adapting and showing the way. AGINNOVATORS’ AUDIENCE AgInnovators is a globally-oriented site and carries stories from around the

develop, test and communicate solutions. The AgInnovators web portal and social media channels provide a platform to share progress and results with Australian and global subscribers.

world. International traffic ranges from 25 to 35 per cent of the total and we expect it to increase with the inclusion of more Mandarin content. Content around solar energy, water efficiency, sustainable practice and digital technology themes has high readership in developing nations. The Australian demographic is highly diverse, ranging across industry, research, government, education and, increasingly, consumers. COMMUNITY OF PRACTICE In Australia – and globally – we need to pick up the pace of innovation in agribusiness. Part of this is sharing innovation more quickly and collaborating more actively. Ours is a community of practice model and AgInnovators is a social network as well as an information portal. Subscribers are notified of events and receive a fortnightly e-newsletter. The network aspect of AgInnovators is supported by a social media presence that includes Facebook, YouTube and Twitter. PROMOTING STRATEGIC PROJECTS AgInnovators projects are future-focused, collaborative and seek to fill gaps in mainstream R&D and extension. The aim is to bring together cutting-edge researchers and technologists with farms and other agribusiness firms to

Source: CSIRO

EDITORIAL POLICY AND CURATION AgInnovators strives to be accessible and engaging while remaining grounded in fact, and carries and promotes only information considered to be from reputable and reliable sources. While the site promotes the activities of businesses as well as peak research and innovation bodies, it only does so if they are genuinely advancing innovation and sustainability across the food and fibre chain. Unlike the majority of portals operating in the agribusiness domain, AgInnovators is not constrained by a mandate to promote only the work of a single organisation or subsector. An important function of AgInnovators is to promote and create links with external content produced by its supporters and other innovation bodies, in Australia and around the world. A typical AgInnovators news article or information paper will outline and discuss issues associated with agricultural research and development, and provide links to relevant scientific, educational, government and industry bodies. AGINNOVATORS TECHNOLOGY AND INFORMATION MANAGEMENT A more mobile-friendly version of AgInnovators was launched in November 2016. A recent innovation gives users the ability to view current AgInnovatorscontent by global location, and as part of the NSW Farmers Innovation Central IoT initiative with CISCO, AgInnovators aims to stream live paddock thermal imagery in early 2017. As poor bandwidth is still a major problem for stakeholders in inland Australia and in some developing nations, the site is on a fast server and optimised to minimise load times. We also provide certain key information resources as simple indexed html files – a good use of old technology to meet real customer needs. This is important for assets that are relevant to readers who are likely to have poor internet access – for example a guide to solar pumping for remote, off-grid properties. The ambitious range of the site’s content makes content management and indexing a challenge. There are thousands of articles and other resources on the site: the aim is to provide multiple entry points for readers so that they are able to access any information they are interested in within two clicks. Content can be navigated by categories that represent key innovation frontiers, for example: digital technology, science and practice, business and marketing and health and nutrition. We also see mapping content as being very important to user engagement. Assets are geo-located and users can easily find content related to their part of the world. PROJECTS AND CASE STUDIES Content generated by AgInnovators projects can be accessed via the ‘Projects’ landing page. This means that a single direct link can be provided to the relevant group of resources: for example, ‘Direct Beef Export to China’. This wrap-up function is of great practical utility to project extension staff at seminars and other meetings. Case studies are becoming a central feature of AgInnovators. Industry stakeholders tend to tune out motherhood statements about innovation and sustainability – it’s important to provide worked examples, involving real people and businesses. We aim to become a leading global curator of quality case studies about innovation and sustainability in agribusiness.

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Interviews with Agribusiness Leaders Australiaâ&#x20AC;&#x2122;s leading minds in agribusiness talk about their successes, the challenges in the business environment and their hopes for the future.

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07/INTERVIEWS WITH AGRIBUSINESS LEADERS

BPTS: Your company has been active in Asia for many years… MB: “30 years, more recently in China.”

Blackmores an interview with a committed naturopathic leader

Senior Editors from Boundless Plains to Share met recently with Marcus Blackmore, Chairman of Australia’s pioneering and iconic naturopathic remedies company, Blackmores. At the sprawling Blackmores Campus close to Sydney’s Northern Beaches, Mr. Blackmore was fit and lively at 71 with an array of insights and anecdotes about China, Asia and the challenges of producing natural products.

BPTS: What advice would you give to companies just entering the Chinese market given your very considerable success there? MB: “It’s not entirely different from other markets, of course, but I do think that some companies treat the Chinese market too much as an opportunity rather than a long-term and enduring partnership. I was reminded not long ago by an eminent professor that the Chinese have been patiently learning about the West for at least 20 years or more. Isn’t it about time we did the same? “Clearly it’s necessary to appreciate the differences of a centrally planned, state-driven economy. And, as usual, this comes down to having the right people on board: our MD for Asia is fluent in Mandarin with a deep knowledge of Chinese culture. Peter Osborne has been going to China for 30 years and spent six years as Austrade’s Senior Trade Commissioner in Beijing. “And of course we must go back to the fundamental philosophy mentioned earlier: is a company setting up for the long term with a proper vision? Has the vision been thought through correctly? Has it been tested? Have relationships been nurtured? The key idea in being successful in China, or Asia as a whole, is based on being a participant in that market and not just a company in business – or worse, just being opportunistic. And being a participant in China means especially working on government relations and understanding how China works.” BPTS: Chris Rees, Australia’s Senior Trade Commissioner in Singapore, is very strong on this issue of full engagement, what you refer to as “participation”. We also recently read a book called The Party, which describes very well the role and structures of the Chinese government – we think it is a must read for anyone considering entry onto the Chinese market. MB: “Yes, and another thing: I don’t think enough newcomers have taken the time to seriously explore the country and appreciate what has been happening in the past 20 years economically, socially and politically. Everyone goes to either Beijing or Shanghai – what about the other centres? There are at least 10-20 major cities worth visiting, each offering their own things to learn. Naturally, this is a progressive process. The market potential justifies this effort and it should be built into a longer-term strategy.” BPTS: Did you experience much red tape in China, in terms of certifications and so on? MB: “Not really, we’re a highly regulated industry in every market in which we operate and so we have the expertise and structure to accommodate this.” BPTS: Did you have any inherent advantages, do you think? MB: “Only insofar as Chinese culture is attuned – and has been for millennia – to supplements, healthy ingredients and natural remedies such as TCM (Traditional Chinese Medicine), so that product concept acceptance was probably high to begin with. Of course this also means their market will be more discerning.”

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BPTS: That would apply to the entire vitamin and supplements sector, yes? MB: “Yes, but obviously it doesn’t eliminate the need for brand-building and relationship creation, and of course product quality.” BPTS: Let’s go back a step. Blackmores has a special heritage, philosophically – can you describe it? MB: “Every product produced by Blackmores is the manifestation of our naturopathic philosophy and an understanding of nature. That is the key.” BPTS: Blackmores has an 80 year perspective on this issue of naturopathy – has the company’s message been a difficult one to convey over the years? MB: “In short, our success has been achieved despite constant confrontation – with governments, pharma industries, medical associations and confusion within the media. I had the honour of sitting next to John Howard at a recent dinner and was able to remind him that our industry had to go head to head with his government over labelling issues – and that we had prevailed. This was all in good spirit of course, but it makes my point.” BPTS: Are you ‘winning’, pushing for naturopathic acceptance? MB: “Without doubt, but this has required immense effort. We have the consumer on our side – that is the key. More and more, people want to know what they consume; they want organic, natural, GMO-free, gluten-free. They may not understand the science around genetically modified foods but they don’t want companies interfering with their food supply, especially adding ingredients they can’t pronounce. At a recent meeting of medical specialist doctors, it was agreed that the most often asked patient question was ‘is there something natural I can take, doctor?’” BPTS: Any other examples of increasing interest in naturopathy? MB: “Today we now have the Maurice Blackmore Chair of Integrated

Medicine at the University of Sydney in honour of my father, the company’s founder. Integrated medicine means a greater acceptance of some of the century-plus-old naturopathic knowledge and remedies by the mainstream medical community. This is a big step up from, say, 40 or 50 years ago when in the US naturopaths were banned from practicing.” BPTS: So you see yourself as being involved more in the remedy business than you do in what is commonly thought of as vitamins? MB: “Yes, our business revolves around nutritional and herbal medicine, I never wanted to be simply a vitamin company, vitamins are ‘accessory elements’ and present only a small part of what we do.” BPTS: What are you working on in regards to science and R&D? MB: “We have an institute of our own, and I was also the Chair of the Heart Research Institute for a number of years. At our institute, which is run by Professor Lesley Braun, we work in close collaboration with established research institutions and universities. The Blackmores Institute is the research and academic arm of Blackmores.” BPTS: Do you have an example of this collaboration with universities? MBTS: “I should add that Lesley is a scientist, pharmacist and a trained naturopath in addition to being the author of a foremost text on supplements in Australia. A recent example of one of our collaborations was with the University of Sydney on a study about non-melanoma skin cancer. The use of a simple B vitamin revealed a 23 per cent decrease in this type of cancer. We are continually involved in special research projects at the Institute, but collaboration with others, like the University of Sydney and the National Institute of Complementary Medicine at Western Sydney University, is what we believe to be the key.”

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07/INTERVIEWS WITH AGRIBUSINESS LEADERS

BPTS: What do our farmers need most to think of, or adapt to in the future, to ensure their prosperity? MA: “In order to ensure their prosperity well into the future, I believe there are three things farmers need to do: they need to engage more with technology, adopt more financial discipline and seek financial advice.”

Interview with Mark Allison, CEO

Elders Ltd

Mark Allison has been CEO of Elders since 2014. With an uncommonly broad range of nonexecutive directorships behind him, he is the driving force behind Elders winning the ‘Large Business Turnaround of the Year’ award at the Turnaround Management Association awards in 2015. Founded in 1839, Elders is a leader in Australian farming and agribusiness with activities extending from the farm gate to major transactions in China. Elders’ businesses cover areas as diverse as wool, beef and grain trading, farmer support and education and a national real estate business. Boundless Plains to Share sat down with Mr Allison to discuss the company and a few contemporary issues affecting agriculture and agribusiness.

BPTS: This view on the importance of financial advice is shared by another of our contributors, Phil Ruthven, founder of IBISWorld and renowned economist. I believe Elders provides this service? MA: “We have a range of support services for farmers, including district bank and financial managers, and our Smart Farmer technical advisory service, which covers many areas of activity directly relevant to farm production. Another aspect of your first question is that farmers should realise that it is inevitable that individual farm size needs to grow and begin to look at ways to achieve this, for example by leasing land rather than buying it.” BPTS: But I believe it goes further than that when we speak of your involvement in R&D, science and specific studies? MA: “Absolutely, we have programs that work with a number of CRCs (Cooperative Research Centres), as well as CSIRO and Horticulture Innovation Australia, and there is a lot of enthusiasm in this area. It is a fundamental part of our identity, and the way we need to travel so as to remain competitive as a great agricultural nation.” BPTS: Who does Elders work or collaborate with in this area? MA: “Well, you can include the cotton industry and MLA, as well as our interactivity with various laboratories on different projects. We believe that innovation is absolutely fundamental, and we’re also working in some cases with multinational corporations on everything from animal health and nutrition to breeding.” BPTS: Fascinating, in a couple of senses. This begs the question if this level of activity is widely known to your shareholders – and who are they? MA: “Various institutions and individuals of course. Perhaps the full extent of their knowledge of our dedication to various forms of innovation is not fully appreciated, it’s difficult to gauge.” BPTS: The reason I mention this is the attitude of funds managers in this country about rural investment. I had a long talk with John Lloyd, CEO of Horticulture Innovation Australia – one of your partners – on this recently… MA: “It will take a long time for the funds community here to appreciate agricultural investment.” BPTS: Why is that, when various overseas funds have been involved and pleased with the results for decades? MA: “I think mainly the answer is short-term investment time horizon, along with competition for attention from the mining boom. Funds managers here today, in my opinion, are using a shorter time horizon to judge the nature of agricultural investment. Overseas you find a different perspective entirely.” BPTS: It’s ironic that many people – even very intelligent ones – thought the mining boom would go on virtually non-stop, when it was clear to some that it wouldn’t as early as 2011.

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MA: “And though the so-called food boom has also had some exaggeration surrounding it, fundamentally it does credibly have a very solid foundation and can be sustained over a very long period of time.” BPTS: What do you think we need to sustain it? MA: “We should have a more united effort nationally to present ourselves to overseas markets.” BPTS: Can you be more specific? MA: “Both federal and state government can play important roles in terms of policy and in focused ‘spot investment’ in appropriate areas at the right time. We need unity and one set of goals, but it is not all a governmental responsibility. We as an industry need to be cleverer across a range of disciplines in the private sector – everything from increasing efficiencies to packaging. We have to build long term partnerships with other countries. One particular area that needs some serious attention is providing more information about specific points of origin of products, regionally and in terms of growing and raising methods: climate, breeding practices, the entire spectrum.” BPTS: This goes well beyond the simple clean and green image we have working for us… MA: “Yes, and we cannot rest on our laurels – we have an education function to perform which is on-going. Of course, clean and green is an advantage

and it’s real, but more detail and communication is needed.” BPTS: Are the Chinese, for example, asking for this? MA: “Absolutely. The curiosity levels are very high and yes, they are beginning to ask more discerning questions. We need to stay ahead of the curve.” BPTS: This of course is one of the primary purposes of Boundless Plains to Share, which in essence is a massive and permanent communications channel, in English and Chinese. Elders broke new ground with the first shipment of live cattle to Chongqing in 2015. Have you been to China often? MA: “More times than I can count – continually. We’ve been in business there for 20 years.” BPTS: What is your view on inbound Chinese agricultural investment? I spoke to the rural investment banker Richard Williams, who describes the situation as absurd. He points out that Chinese investment is a positive and we are going through a re-run of the behaviour shown to the Japanese in the 80’s. MA: “It is a total positive from many perspectives, including impact on R&D, infrastructure development and productivity enhancement. I would say it is essential, in fact, for the furtherance of development on the scale desired for Chinese inbound investment to occur and grow.”

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07/INTERVIEWS WITH AGRIBUSINESS LEADERS

Interview with Andrew Hunter, Managing Director & CEO of Efic For an organisation that can transform companies and enlarge our economy, its prosaic name does not do it justice. Founded in 1957, the Export Finance and Insurance Corporation (Efic) has grown from a $6 million fund to a self-growing entity that has $450m in retained earnings and access to additional capital. Its purpose is to fund promising export companies, where banks fear to tread. Efic’s services, too little known, can often make a difference, especially for small businesses. Today, in light of ChAFTA and other developments, it is more relevant than ever – particularly in the burgeoning specialty food sector. Boundless Plains to Share speaks with Managing Director Andrew Hunter about changes in the organisation, innovation export and the hard facts small companies ought to know.

BPTS: Some point to a chequered history at Efic, but our experience is that the organisation is generally insufficiently understood – would that be fair to say? AH: “It’s true. For a relatively short time, between say 2006 and 2012, we may have lost sight of our vision and place. We were at the centre of a parliamentary inquiry over large loans to large companies. That era has passed.” BPTS: What happened? We note that you began at Efic in 2013 with a background working at BT Financial Group and Macquarie Bank. AH: “Yes, around that time we started a transformation back to our original purpose – and beyond. We have heavily re-focused on SMEs and are expanding that activity at a fast rate.” BPTS: Can you give us some figures? AH: “The big picture is interesting, as to our economy and also our function within it. There are 45,000 small and medium size enterprises in Australia. 10,000 of those are over $5 million per year in turnover – 35,000 are below $5 million per year. Whereas we are interested in working with both sides, we are particularly keen on the smaller side where there is a lot of innovation and excellent work which needs our kind of support.” BPTS: What does your current portfolio look like? AH: “In the past three years, we have facilitated $300 million in transactions across about 200 small companies, and this growth is accelerating. This year we aim to do $150 million in transactions.” BPTS: And these are for companies who are not able to attract bank support? AH: “Yes, banks are based on a principle of wanting collateral in bricks and mortar. This is often not an option for a small but otherwise deserving company.” BPTS: So what are your criteria for accepting a company? AH: “Almost always it is the existence – their accomplishment – of an export contract. We figure if they can compete with the world’s best – which is precisely what they are doing – and obtain an export contract, then they are of initial interest to us.” BPTS: That’s all? It sounds as if that is a fairly low bar for assessment. AH: “No and no. First, it really is a major accomplishment for a small company to win a substantial export contract in the wider world – again, they are up against fierce competition so it is a very sound criterion, initially. Beyond that of course we look at management capability, financial sophistication, technical uniqueness, product feasibility in a market and a range of other things. But I really wouldn’t underestimate the first point, it is very meaningful.” BPTS: It sounds as though you have a skill set not dissimilar to a good venture capitalist, in making assessments? AH: “True, we have brought in new talent in the past few years. We have had a large turnover of staff, with the deliberate infusion of some highly skilled

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people in our SME operations. Some of the evaluations are not unlike the work of a venture capitalist, but the end goal is different. We see ourselves as partners with banks.” BPTS: How so? To me it seems as though you would be replacing their role, rather than being a partner? AH: “Our role is to assist with what we call ‘demonstration’. If a company can prove it can prosper, grow and increase exports over a couple of years with our assistance, then in fact they have demonstrated the exact performance which the banks want to see. At this point, they are then capable of receiving large bank support without the traditional collateral requirement of security. We are only too happy to then recommend them to the banking community. Remember, we are not a competitor to banks, hence the word ‘partner’. Unlike a venture capitalist, we have no need or desire to take equity in these companies – we just help them through a crucial period.” BPTS: So really you are a crucial driver in what turns out to be a virtuous cycle? AH: “That’s a good way of putting it. We play a deliberate short to medium term role, and yes, usually it is crucial. For a company turning over $2 million per year to double their exports over several contracts in a couple of years is a giant step.”

BPTS: What is your failure rate? AH: “Very low indeed, which is another form of proof that achieving an export contract really does mean something. Until this year our failure rate in the current portfolio of 200 companies was virtually zero. This year it will climb to about 3-4 per cent.” BPTS: How do you feel about this climb? AH: “As an experienced banker, and also being involved in this important space, it tells me that our appetite for risk is at about the right level. No one likes risk, but extreme aversion to it is anti-innovation and not at all good for the economy as a whole. It’s not a good outlook for someone with our mission.” BPTS: That’s a refreshing view in finance today. And yet we understand you are underutilised in terms of your capacity? AH: “Potentially, probably. We could be making more loans and would like to – if we can see the export contracts, we are prepared to back management capability, absolutely.”

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Interview with Professor Ian Brighthope, Chairman of

Nutrition Care

Ian Brighthope M.D. has been at the vanguard of complementary medicine for decades in Australia. He is credited with coining the term ‘integrative medicine’ to define a healthcare philosophy that combines conventional medicine and modern medical practice with complementary medicine and therapies to focus on individual patient care. In addition to maintaining a private practice from the 1980s onward, he founded four bio-centres and subsequently Nutrition Care, a company that produces natural vitamin mixtures, sold in Australia and exported to many countries including India and China as preventatives to disease.

BPTS: You commenced your work in animal science, then entered the medical profession, is that the case? IB: “I studied agricultural science and graduated, then had an interest in trace elements and animal nutrition at the time. After a year or two of research and teaching, I began studying medicine. Halfway through my medical course, I formed the opinion that medicine was focused on the treatment of disease and not the total management of the patient. The greatest deficit there was the patient’s nutritional wellbeing. I made some enquiries and asked questions during my clinical years, and I didn’t get many satisfactory answers as to what to do about a patients’ nutrition. “At that stage I was looking after crops and animals, and would be nourishing them better than what we were doing with patients at hospitals. So I decided then that I would change my ways of practicing medicine once I graduated and gained some skills and would start looking at nutrition. I coined the term ‘nutritional medicine’ and spoke to likeminded colleagues, then formed the College of Nutritional Medicine in the 1980’s to train doctors.” BPTS: And you have since established a practice for human medicine? IB: “I’m retired from private practice now but was previously practicing for 35 years. I broke away from the practice I was in to start my own practice, and told patients that I wouldn’t be focusing on treating their disease as

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‘integrative medicine’ has gone worldwide.” BPTS: Is the unique difference in your products at Nutrition Care Pharmaceuticals the mixtures of various vitamins? How would you describe the uniqueness in Nutrition Care products? IB: “Number one, the Nutrition Care products are based on the clinical work I’ve done, so we get the correct balance of ingredients. Also, we use ingredients that are proven to be effective – we look at the evidence to see if the nutrients are absorbed and utilised by the cells and tissues most effectively. The other big point of difference is that Nutrition Care actually has a manufacturing facility and manufactures its own products, unlike most of the other big brands that outsource their manufacturing. We’re not just a marketing company, we’re a manufacturer. We do a lot of R&D and we source our raw materials from the best sources around the world.” BPTS: In the case of Nutrition Care products what does ‘natural’ mean? IB: “If there is a molecule that we’re using and it is identical to the molecule that occurs in nature, then we call it ‘natural’. If Vitamin C is synthesised in the laboratory and the molecule is exactly the same as the Vitamin C molecule that you find in a bean sprout or orange juice, then that is natural.” much as trying to make them healthy so they could beat their disease if at all possible. The emphasis was on changing their diet, changing their attitude and giving them appropriate supplements for the deficiencies from which they were suffering. It was essentially a program to make people healthy again with diet, exercise and a positive attitude. “My practice grew to encompass four centres around Melbourne, with one clinic where I did all the assessments and three treatment centres. I employed doctors and nurses, but also other healthcare professionals including naturopaths and herbalists, at a time when doctors who associated with non-medical professionals could get themselves into a lot of trouble. But I found that those modalities helped people so they were part of the clinic. “We looked at all the finer aspects of managing mineral and vitamin deficiencies and not just piled lots of calcium into people who had weakened bones, for example. We would treat osteoporosis with not only calcium but magnesium and also trace elements like copper, zinc, boron and manganese to improve the bone mineral matrix. We approached it from a far more scientific point of view than the medical profession at the time.” BPTS: We understand you coined the term ‘integrative medicine’. What is the difference, if there is one, between integrative and complementary medicine? IB: “Complementary medicine doesn’t mean very much to me – ‘complementary’ comes from the word ‘complete’, and if you don’t complete your treatments with a patient then you’re practicing in a negligent fashion. ‘Integrative’ means integrating all healthcare practices and medical practices that are proven, safe, effective, inexpensive and ethical. And that means using not only Western medicine and the usual medications, but also incorporating nutritional medicine, scientific-based herbal medicine, physical medicine and physiotherapy, chiropractic therapy and acupuncture. “We incorporated all of this into our practice, and the best word to describe it was ‘integrative’. I had a business called Integrative Medical Centre, and when the College of Nutritional Medicine had issues with regulators, we set up the Australasian Integrative Medicine Association (AIMA) in the mid 1990’s. Subsequent to the formation of AIMA, the term

BPTS: Turning to the larger picture, how would you describe Australia’s role and position as a leader in integrative medicine? IB: “Australia did take a leading role in nutritional and integrative medicine – and in fact was the first country in the world where organisations formed for these particular purposes. But now the rest of the world has caught up and, in some respects, passed us. As a small country we don’t have the resources as a lot of other nations. But in terms of innovation, we have a lot of good ideas and are very innovative. I believe we could be a world leader in integrating the best modalities into the healthcare system to improve the general health of the population. “The most important part of this is integrating nutrition and nutrients into the healthcare system far more than we have in the past. We have a revolving door syndrome in hospitals, and we can stop that syndrome simply by feeding patients better and supplementing that with nutrients if patients require them or are deficient.” BPTS: What advantage does the strict regulation of the Therapeutic Goods Administration (TGA) give Australia over other countries? IB: “It gives a massive advantage to Australia over other countries. The standards by which we make our complementary medicines, our vitamins and minerals and herbal medicines are the same as those applied to the manufacturing of pharmaceutical medicines. It is an extremely high set of standards. We are stringently regulated, licenced and audited by the government. It means our products are the safest, most effective and of the highest quality in the world. “If you are in another country, you can manufacture under food standards and sometimes those standards are relatively low. The advantage of Australian products is substantial, particularly in markets (such as China) where the consumers have been educated of the regulatory differences between Australian and, for example, American products. Our clean, green and highly regulated image shines through – it’s not just an image, it’s reality.”

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07/INTERVIEWS WITH AGRIBUSINESS LEADERS

various natural diversifications. You could say we are led by their needs. Of course, the trigger to Ruralco’s growth in modern times was the 2006 merger with Roberts which catapulted us into the top tier of rural businesses. In 2015 the Roberts business celebrated its 150th year of operation – this was a milestone within the business and something we, as a group, are extremely proud of.”

Interview with Travis Dillon, CEO of Ruralco Following several senior postings at Ruralco since 2007, Travis Dillon was appointed CEO and MD in late 2015. In an interview with Boundless Plains to Share, Travis spoke incisively about various aspects and undertakings of Ruralco itself and the agribusiness sector in Australia – from his over twenty years of professional involvement with the sector.

BPTS: We read yours is a stock to watch. How would you describe your points of difference, in relation to the other major agribusiness companies? TD: “The areas of water and irrigation are a major point of difference and a key area in our development. There was some involvement in water pre2006, but much has occurred since the merger with Roberts. We want to develop a suite of proprietorial products and services in this area, and are doing so now.” BPTS: What else is a point of distinction? TD: “Our channels to market offer us a unique position in the sector. We have our CRT member network that own and operate their rural supplies businesses, and we also have a very strong network that Ruralco has equity in. Some of these Ruralco equity business are joint ventures which have been a key driver to Ruralco’s growth in recent years.” BPTS: Your ‘company of brands’, appetite for acquisition and overall success remind us of AECOM, though they operate globally and in a different industry. They too grew very rapidly through acquisition and very sensible integration. And proving an important point – some M&A strategies in fact work very well… TD: “True, but we also ensure a continual amount of origination – both within acquired companies and from scratch. And this provision of new services, whether it comes from one of our 40 brand companies or a new one we might create is due to our philosophy.” BPTS: Which is what? TD: “It’s simple: we listen to the farmer and anticipate their needs, explore them and either expand a service in an existing brand, seek an acquisition or determine to launch a new business. Typically, as a prudent company, we put our toe in the water, test and then continue.” BPTS: And by the numbers, it seems to be working to judge by your 2015 annual report. TD: “I should add regarding philosophy, we are resolutely a locally based national company – we have 500 locations across Australia. We are where the real action is taking place, close to the farmer.”

BPTS: Ruralco, on inspection, is a far more diverse organisation than is generally recognised… TD: “We describe ourselves as a ‘company of brands’. Appropriate diversification through both acquisition, as well as the creation of entities within the scope of our core strengths, has been our guiding strategy.” BPTS: Can you elaborate on that? TD: “The ultimate aim of the company is service and product provision at the highest level for the farmer – he or she is the customer. That has led to

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BPTS: What does innovation mean to you? TD: “My view of innovation is doing things more efficiently, either internally or externally with our customers. Innovation is all around us, however there is little doubt that technology has increased the introduction of innovation exponentially. Ruralco has a strong focus on innovation and we have launched a number of internal activities that will enable us to bring that innovation to our customer base more readily than we have done in the past. The aim is to bring innovative products and services to all Ruralco activities including livestock and financial services.”

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Interview with John Harvey, CEO of AgriFutures Australia

The widely respected Rural Industries Research and Development Corporation (RIRDC) recently underwent a significant restructure and rebranding as AgriFutures Australia. The man at the helm of this restructure was AgriFutures CEO John Harvey, previously CEO of the Grains Research and Development Corporation (GRDC). John spoke with Boundless Plains to Share about the restructure and the new focus of AgriFutures Australia.

BPTS: We see that our interview is timely – change is afoot! JH: “AgriFutures Australia is the new name for RIRDC, but it’s much more than a name change. The organisation has set its sights on a bold new direction to grow the long-term prosperity of Australian rural industries and is now ‘open for business’. “The organisation has seen a great deal of change over the past 12 months, and it’s not just in the name. It’s been a convergence of circumstances – we have a new location in Wagga Wagga NSW, a new Chair in Mrs. Kay Hull AM, a new Managing Director and a new team. All of this has given us new insights and presented new possibilities for how we deliver value to Australia’s rural industries. “AgriFutures Australia represents many months of research and discussion with stakeholders and it is a name that reflects a significant change within our organisation. We’re looking ahead and are firmly focused on our goal – to grow the long-term prosperity of rural industries and communities through research, innovation, and developing human capacity and leadership.” BPTS: Where have you arrived as to strategy and new thinking? JH: “Our new strategy focuses on four key areas: people and leadership, national challenges and opportunities, growing the profitability of our rural industries and establishing emerging industries. It also takes advantage of our unique cross-sectoral mandate to look at opportunities and issues facing all rural industries. We want to lead collaborative research in agriculture and drive innovation of national and global significance.” BPTS: Can you break down those four key areas you mention and tell me what the organisation’s aims are for each? JH: “Definitely – in terms of people and leadership, our focus is on attracting talented people into the agriculture sector and building the

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skills of emerging industry leaders. In the second area, we are identifying and addressing challenges and opportunities that are common across rural sectors, such as supporting our country’s ag-tech innovation ecosystem. A focus on growing the profitability of our rural industries means delivering value through profitability improvements to our levied rural industries like rice, chicken meat and export fodder. For the fourth area, we will look at establishing high-value potential emerging rural industries.” BPTS: What are the principal reasons for these changes? JH: “It’s important to note here that while this strategy is indeed new, it is not wholesale change for change’s sake. Our new priorities are built on the solid foundation set by RIRDC and will allow us to deliver even more value to Australia’s rural industries. It builds on years of hard work from past Directors, employees, farmers and research partners, all of whom have made it possible. The short answer to your question is we have made these

changes because Australian agriculture has changed, and it continues to change rapidly in the face of many challenges and opportunities.” BPTS: Does this structural change indicate a shift in world view or purpose? JH: “To a degree, absolutely yes. The world has changed and we are obliged to move with it. We live in a hungrier world where population growth will drive up demand for food and fibre and customers who are empowered by information and will expect more from their food in terms of health benefits, provenance and sustainability. In addition, agriculture’s risk profile is being reshaped in the face of globalisation and climate change. “These are some of the challenges, but opportunities also abound. They include the onset of transformative technologies that will change the way food and fibre products are made and transported, and a wealthier world where a new middle-income class will increase food consumption, especially protein, and diversify diets.” BPTS: Would you say that AgriFutures is becoming more businesslike in its thinking? JH: “Again, to an important degree, yes. The rural industries that will be resilient, profitable and competitive in the face of these challenges are those that actively consider what is coming next and position themselves to respond. This requires not only effective research and development at an industry or commodity level, but a commitment to developing human capacity and leadership – something AgriFutures Australia is uniquely placed to deliver.” BPTS: We’ve heard about your belief in the importance of partnerships –what can you tell us? JH: “We are ramping this up dramatically and entering into partnerships with established industries like rice, chicken meat and honey bees, and also partnering with other Research and Development Corporations and research organisations. These are all partnerships that tackle the issues that rural industries face to benefit the Australian people. “But whether it’s fostering ag-tech or establishing new industries, we aren’t going to be able to do it on our own and the private sector has an increasingly significant role to play. We’re taking a new, more commercial, approach to research and innovation and over the next five years will be actively seeking private sector partnerships.” BPTS: As to this issue of being businesslike and given your past in research, how do you see the two blending for the future? JH: “We know that doing great research is just the start. What’s more important is the point at which a farmer does something different on their farm or in their business because of the research. That’s where the return on investment happens. “At AgriFutures Australia, our goal is to grow the long-term profitability of Australian rural industries through research and innovation. We will not stand by and let Australian agriculture miss the enormous opportunities that the future holds or be overwhelmed by the challenges of tomorrow. By focusing on the people in our industry, taking a national approach, improving profitability and establishing valuable new industries, AgriFutures Australia can and will make a real difference.”

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07/INTERVIEWS WITH AGRIBUSINESS LEADERS

Interview with Tim Hart, CEO of Ridley Corporation Ridley is Australia’s leading provider of high performance animal nutrition solutions, serving the agricultural sector for almost 30 years. Tim Hart carries a range of leadership experience from major food, hygiene and packaging companies, as well as numerous non-executive roles in varying environments across the world, making him a consummate spokesman for the sector. He spoke with Boundless Plains to Share in his Bourke Street offices about running Australia’s largest stock feed company and several wider agribusiness issues.

BPTS: We find it interesting that animal feed is considered in many minds – some farmers excluded – a dull topic, but it is not. What words would you choose as key to this field? TH: “Certainly not dull. Fundamental is one word, two others would be progressive and sophisticated. Science is another one, and let me add education.” BPTS: Thanks, a good menu. Perhaps though we could begin with scale – Ridley Corp is the largest company of its kind in the country. What advantages does this bring? TH: “Size has its advantages of course. It gives reach and ability to perform, but it’s not everything –good management remains the essential lever. We also need to be very focused on our local markets.” BPTS: But what would be the clear advantage of size by itself? TH: “The ability to service, innovate, experiment and do such things as to make acquisitions which are appropriate to deliver our service offering.” BPTS: Let’s talk about service – how does it work at Ridley? TH: “We have a vanguard of 25 PhD- and Masters-qualified employees doing research and a lot of field work, interacting with farmers, some of which is collaborative sharing, you might say. Take the Dairy industry which is a sophisticated sector in the market with room for improvement – it’s big and important. Dairy is not just a question of producing more milk, there is a midterm view needed which deals with issues of environment, long term animal health, agronomy, feeding practices, genetics and planning.” BPTS: And your PhD- and Masters-qualified employees contribute in all of these areas? TH: “There is a lot of collaboration. Our people are largely animal nutrition and feed experts. It would be an exaggeration to say they are experts in the other central areas, but through a lot of experience, they can contribute effectively in a well-rounded way.” BPTS: What are the other central areas to animal food production then? TH: “The big three areas where the objective is to lift productivity are constant: genetics, feed, and animal husbandry. When it comes to both quality and productivity, you cannot really talk about one in isolation, you need to talk about these factors together. You are also looking at feeding models overlapping with animal husbandry models. Take the US as an example: in my opinion, the US has a more sophisticated intensive model, and because keeping animals in barns is common, it lends itself to different feeding models.” BPTS: Australia is widely regarded as very advanced in agriculture generally. Are your observations that we may be in need of more sophistication in some areas? TH: “Yes and yes. Sure, we are a great agricultural nation – there’s abundant proof. But to suggest we are doing everything perfectly would be foolish, no one is. Do we need more education in Ridley’s area of expertise? Yes. I don’t know percentages on this but broadly there is a substantial group, though a minority, who are seriously aware of the full spectrum of issues regarding feeding strategies and science. Then there is a second group who are semi-aware. And then the rest. ”

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BPTS: Is there a correlation between property size and degree of sophistication? TH: “To a large extent yes – as in any industry, scale provides more capability and creates more demand and opportunities. But there are a fair few cases of smaller operations that self-educate – or seek expertise – and also operate sophisticated enterprises.” BPTS: Given that Ridley has a strong portfolio of the larger businesses, what percentage of these, being in the “sophisticated” class, require special or unique feed mixes from you? TH: “85 per cent is a reasonable guesstimate. And yes, that would be a mark of what I call sophistication or scientific awareness. It means they are deeper into analysis, and probably looking at the whole model beyond feeding as well.” BPTS: Going back to your three primary criteria or conditions for quality yield, can you think of a midsize producer who is an industry leader? TH: “There are quite a few, but one of our customers, The Pastoral Pork Company, is one. They have a successful brand called Otway Pork.” BPTS: Yes we know them, outstanding product. We read they have really worked on optimising health and production in an outdoor environment, Ridley is feeding them well, and even their packaging is special… TH: “Don’t forget the genetics in Pastoral Pork and many other cases – it is very important, and they put a lot of emphasis on that.” BPTS: And what is happening in animal feed as far as disease resistance is concerned? Is science at work there? TH: “Yes, but possibly in a way that is not fully appreciated. Improvements in genetics, animal nutrition, biosecurity and production management practices are all examples of the science at work. More specifically, science has enabled us to improve our understanding of exactly what nutrients the animal needs for optimal health. We now have access to a lot more natural feed ingredients that enhance gut health and immunity, and we have a better understanding of how and when to incorporate different strategies to ensure optimal health over the lifespan of the animal.” BPTS: You’ve done a lot of other science work with CSIRO and some universities, we read… TH: “The CSIRO connection goes back 15 years regarding the Novacq™

product, which is hugely promising. It is a natural feed ingredient for farm-raised prawns, now being tested in Thailand with early research just surfacing. But the sample bases are still small, and we are being cautious. At the moment we think we are 18-30 months away from a full scale operation, but the promise is very exciting.” BPTS: What are the early findings? TH: “They are significant. Initial lab trials suggest the growth rate of prawns has been enhanced by a factor of 1.4. And the survival rate increased by 37 per cent in a recent small scale commercial pond trial. So you can multiply that out across the world, which has huge potential upside.” BPTS: So we may see Ridley become active in Asia? TH: “Ridley has already acquired a Joint Venture interest in a feedmill in Chanthaburi, Thailand, which also represents a critical step in Ridley’s wider strategy to develop and commercialise Novacq™.Time will tell, but of course we are very committed.” BPTS: And we read you are doing different projects with James Cook, Deakin and Monash universities, as well as the University of Queensland? TH: “Yes, all four, and we are open to other collaborations.” BPTS: What is your personal view on the medium and long term future of Australian agriculture and agribusiness? Do you think we are in a position for consistent value creation? We incidentally try to avoid the word boom, as there has been some severe exaggeration. TH: “I agree with both parts of that. No doubt we are very well placed, have the science base and the experience. We need to continue to upgrade our offer, be more united on brand Australia, improve infrastructure and be more innovative and productive. It’s also down to good management, and realistic forecasting.” BPTS: With that in mind, do you have an opinion about the Australian proclivity to be rather reticent, even negative, about investment in the agricultural sector over a long period of time? TH: “Yes, the perceptions and the actions have been very average at best. I don’t see any rapid change, though it is interesting to note we have had overseas funds active here for decades who enjoy good returns. Generally, the sector is very promising.”

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Interview with AndrĂŠ Teixeira, General Manager of Innovation at Bundaberg Brewed Drinks

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Bundaberg Brewed Drinks, not to be confused with Bundaberg Rum, is a family-owned world leader in its field, active in 43 countries. Dr AndrĂŠ Teixeira joined the company a year ago, bringing his vast food science and business experience to his new position. He has had a remarkably global career working on six continents, including 23 years at Coca-Cola, where his last position was President for Russia, Ukraine and Belarus. In Australia he was previously General Manager of Innovation at Goodman Fielder and subsequently held a specially-created position as Entrepreneur in Residence at CSIRO. Speaking to Boundless Plains to Share, he offers insights on growth, entrepreneurship and internationalisation for the Australian food and beverage industry (read more in his article on page 14).

BPTS: We were a little surprised to discover you had gone to Bundaberg given your global background. AT: “It’s much more than you might imagine. I am still intensely global and living in a vibrant small city surrounded by some of the world’s finest food products. And in a company which is strongly family- and communityoriented, ambitious, successful and seriously focused on innovation in the fullest sense. “The natural bounty of this micro climate region is astonishing for any nature lover or food scientist. It is the home to the largest macadamia nut production in the world, and side by side are the finest strawberries! The ethics of the company are commendable – there is a deep commitment not only to quality, but to creating proudly Australian products. Bundaberg is a world market leader, deeply devoted to craft.” BPTS: Craft is an enticing word, can you expand on that? AT: “The company is probably the only one on earth where all its products are brewed non-alcoholic drinks. Brewing with yeast in a manner to prevent transition into alcohol is truly an evolution of a fine craft which goes back centuries. Part of this craft extends to things like growing some of our own ginger, carefully creating ginger powder and selecting supreme local products. The core product – ginger beer – was most likely the first ever soft drink made for children, originating in England and Ireland. This is a tradition which we can build on in the 21st century. Tradition is part of the concept of craft – which by no means rules out improvement on tradition, or innovation. Craft implies care, and it certainly hints at connoisseurship. I would include great attention to detail, a striving for perfection that goes beyond the issue of making money.” BPTS: Yes, there is a lot to say about the philosophy and practice of craft. On reflection, it seems that a fair amount of Australia’s marketable and exportable products could well fall into the craft category – from wine and

specialty beers to Ugg boots and Akubra hats, as well as certain agricultural implements, R.M Williams products and many more. Getting back to Bundaberg Brewed Drinks, we understand you’ve managed to leverage the ginger beer into a creative line which appears to be growing? AT: “Yes, and this will continue as there is a world of potential. And note that many of these successful brewed drinks – mango, passionfruit and guava – are based on the beautiful products from our region in Queensland.” BPTS: Let’s talk about business. You’ve historically worked not only as a food scientist and R&D head but across the board in many respects, no? AT: “Yes, I have been fortunate to have been given all-rounder assignments, ranging from R&D and innovation through to marketing, operations and general management. I have also helped to create start-ups in areas ranging from technology to a new way of marketing beverages. I have also consulted on innovation for a number of different businesses in many countries.” BPTS: Involving what sort of duties? AT: “Everything from expanding R&D infrastructure, new product development and technology development – which is my historical roots – to launching and managing companies or divisions, marketing, branding, strategic analysis and high level financial analysis. And of course all the often tough and dreary work associated with managing export or overseas operations.” BPTS: What does your current export situation look like today? AT: “Let me start the answer to that with a small piece of business philosophy: companies should expand into markets where they can ramp up quickly and cost effectively. So in our case, the USA is important. Why? Because ginger beer and ginger itself is known and appreciated. California in particular is a prime market, but other states as well. Europe is a growing

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priority, definitely a key market, but less advanced. We are active in Asia, with an existing fair and growing market in Korea. China has huge potential and we are present, but it must be paced correctly. Each of the 43 markets we are in must be looked at individually, even by particular states – California is different to New York, for example.” BPTS: That’s useful, but rather obvious, don’t you think? AT: “You would be surprised. I am not convinced that some good companies actually differentiate and stage appropriately.” BPTS: Are you referring to big or small companies in this sense? AT: “Both. Smaller companies might be restrained by lack of capital, but still commit some of the same mistakes.” BPTS: Such as? AT: “I see a fair few companies – big and small – opening embassies rather than markets. There is an in-built human desire, a striving for the glamour of being international. Putting names of locations on business cards, without thinking through a proper business approach first. For example, we do not have anyone directly working for us in Europe as yet.” BPTS: And in the USA? AT: “Yes, the market and turnover have justified investment in

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infrastructure, both physical and human, in select markets there.” BPTS: And what about market differentiation? AT: “This is a useful point for Australian companies wanting to expand. It’s about proper international understanding, cultural perceptions, pre-existing knowledge of product categories and the country of origin itself. In the UK and the US, there is – in my opinion – a stronger knowledge base and an appreciation for Australian qualities than, say, Holland. I am talking about general impressions about the environment, quality products, climate, methods and standards. “Research can be conducted economically, empirically and through existing data in some cases to form judgments. These judgments will help in projecting sales, speed of growth potential, ideal products and a number of key items which inform decisions. And again, each country is different. There is a proclivity – probably everywhere to some extent, but I think particularly acute in Australia and the USA – to fail to see outside the home market and see things accurately in a different country. Yes, this is obvious, but is it being practiced enough? I don’t think so.” BPTS: How far can you take such pre-analysis? AT: “There are no rules, except that each situation is different. Here’s a practical example which we use: you can market test which products in your line are going to perform better in a given market, and leverage your

Australia enough in their marketing? AT: “There has clearly been some excellent sustained work done in this area. But with what we have to offer, there is never enough. The deeper answer is to align the home country virtues with those of the product in question in an effective manner. If you look at the great work being done by Food Innovation Australia (FIAL – see page xx for an article by Chairman of FIAL Peter Schutz) you will see some fine business education. They stress the importance of harnessing Australian values or perceptions and incorporating them into marketing.” BPTS: What are our most striking qualities which cut through overseas? AT: “Again it will vary somewhat with each country, and of course the type of product. But you can make some sound generalisations here. Fortunately, Australia’s international reputation has grown enormously over the past 30 or so years, for a number of reasons. Everyone is aware that in China, Australian products are known and desired for a clean environment and good practice. New Zealand has done a superior job with its ‘100% Pure’ logo and campaign, and we have the same advantages, with greater scale and variety. “But more broadly, Australia is known for its simplicity, product integrity, excellent food science and technology, food innovation and great natural products. And as we discussed, we are known for craft – we have the wine and craft beer industries to thank for pioneering this reality and creating a positive image.”

marketing accordingly. You might choose to focus resources initially on just one or two products. A one size fits all approach generally is not going to work internationally. And if one is astute, a good picture of a market can be obtained effectively without high expenditure. We’ve proven this, repeatedly.” BPTS: And in Europe you have been able to do this without your own offices and major infrastructure expenses? AT: “Yes, and this is really a point about investing in human resources, people with the right international exposure and good perceptions, both at distributor level and in terms of staff who may visit, analyse and supervise. This is crucial, and I would think often enough ‘make or break’ for small companies in particular. A tendency to send out an excellent domestic performer with no international mindset seems a common enough mistake. It might be treated as a reward of some kind, but is it good for the business? There is too often a fear of risk or things foreign and favouritism for a good loyal, domestic employee who might lack openness to a new market. But the real risk is failed performance in a new market, isn’t it? The outside world is not Australia. We are an example of how to do this gradually, building awareness as we go.” BPTS: Looking deeper at some comments you’ve made about the Australian image overseas, do you think companies are leveraging the general image of

BPTS: Have you seen evidence of a surge in small entrepreneurial food and beverage companies over recent years? AT: “Yes, to a huge extent, and it’s very encouraging. I heard recently that there were at least a couple of dozen fairly new gin producing companies, working with different botanicals – another example of craft, and food innovation, if you allow gin to be considered food! But there are countless numbers of new entrants appearing. “Two important points come to mind. First, these value-added premium products really form a big part of the future of Australian food export – contrary to the food bowl of Asia myth. And the other is that these exciting new aspirants will need to master export, as we have been discussing. Organisations like Efic (see page xx for an interview with Efic’s CEO), FIAL and Austrade become very important in assisting this process of building the future. Young companies must deal with tough compliance issues and a range of other challenges, but I believe many can prevail.” BPTS: We agree that the future in your sector has never looked more exciting or more innovative, which makes Bundaberg Brewed Drinks something of a wise grandfather on the scene. Do you have any closing thoughts? AT: “The emerging companies we’ve been discussing need the will and the vision to find their own balance across a few key areas so as to grow and internationalise: The use of technology, investment in the right people with good perceptions and especially the maintenance of their core values and premium product dedication. “And going back on the question of leveraging the Australian image, I’d go a bit further – we are known as a healthy, athletic nation with an abundance of natural beauty and a wonderful climate. Australia is perceived by much of the world as, and really is, a land of dreams. Let’s not forget this.”

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Science, Technology and Biosecurity Australiaâ&#x20AC;&#x2122;s commitment to science, technology and biosecurity is immense. It is widely understood that this commitment is crucial to maintaining Australiaâ&#x20AC;&#x2122;s leadership in agriculture and agribusiness.

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The importance of science in Australian agribusiness D R ALA N FI NKE L A O, Australia’s Chief Scientist, speaks about the role science can play in furthering the agribusiness industry both globally and in Australia.

hat do you picture when you think of Mars? Do you see a wasteland of craters and volcanoes, colder than Antarctica’s heart, drier than the Atacama Desert? Do you imagine raging winds that whip up blood-red soil? Do you care about a place so far away that even the fastest spacecraft would take half a year to reach it? Or do you see what NASA does: a potato farm in the sky? In April 2016, the agency briefed global media on its plans to sow 65 varieties of potato in 600 kilograms of soil collected from the Peruvian desert. That’s the only place on Earth you can find anything close to the microbe-depleted Martian terrain, fifty times more arid than California’s Death Valley. And yet it’s still probably more hospitable to agriculture than Mars. The challenge is enormous, but so too is the ingenuity it has awakened. Teams linked to NASA’s astrobiology program have developed fast-growth seed chambers for growing guaranteed pathogen-free tubers. They’ve developed handheld chlorophyll meters that give an instant reading on plant nutrient needs. They’ve coupled plant sensor networks with sophisticated software to deliver nutrients and pesticides with pinpoint precision. And if the promise of Martian soil comes to the proverbial dust, there are

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many other ways of approaching the challenge of astrobiology – from LED grow lamps, to bioengineering, to aeroponics. Of course, no one seriously imagines that interplanetary potato farms are going to cater for the booming food demands on Earth, or that we will be serving up chips and gravy in a human Martian colony any time soon. And yet in all of these endeavours there are critical lessons for humankind. Mars doesn’t have “boundless plains” to waste. Imagine if we thought that way on Earth and eked out every drop of our planet’s potential. Imagine if we farmed in the knowledge we’ll be feeding 9 billion people by 2050, nearly every one of them with developed-country calorie and protein expectations. Small nations have long led the way, simply because they have no other choice. To find the world’s great agricultural innovators, I don’t look to nations blessed by climate and abundant land. I look at the hydroponic factory in Japan that produces 30,000 heads of lettuce a day with one hundredth of the water traditional methods would require. Or I go to the Arava in Israel, where flowers for export bloom in the desert and the average dairy cow’s yearly yield is double that of its Australian counterpart. Then I look at Australia, rapidly hitting the limits of new land available for cultivation even while eager customers in Asia show increasing interest in our agricultural products. Our potential, too, is immense. New technologies will help us eke out more tonnes per hectare from agricultural land. And even if the best-case yield cannot be increased much further, we can reduce the worst-case yields during weather fluctuations by using data from satellite observations, unmanned aerial vehicles and moisture sensors. Equally important is to increase the dollars earned per tonne by using tracking technologies and data analysis in ever more innovative ways to demonstrate the provenance of our products and allow us to charge premium prices in fussy markets. Make no mistake: there are still boundless plains in Australia, and there’s room for all of us to stand at the frontier. But it’s not going to be plotted on your standard maps. It’s science. Stand at the borders of the boundless plains armed with curiosity, creativity and capability, and you will see the opportunity on the other side.

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The NBN, ICT and Australian agriculture Australiaâ&#x20AC;&#x2122;s agricultural industry is one of the most productive and efficient in the world. One of the key reasons is the level of technology used on Australian farms. GRAEME PHIL IPSON looks at how broadband and Information and Communications Technology (ICT) are changing the face of Australian agriculture.

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n the fertile New England ranges in northern New South Wales there is a remarkable 7000 hectare farm. The Kirby SMART Farm, set in rolling hills a few kilometres north of the city of Armidale, is a showpiece demonstrating the many ways that technology is shaping the farm of the future. The farm was established by the Armidale-based University of New England (UNE), in conjunction with CSIRO, Australia’s premier government scientific research organisation. UNE has one of Australia’s largest faculties of agricultural science and economics. Kirby is stocked with 7000 merino sheep and 100 head of beef cattle, and was one of the first rural properties in Australia to be connected to Australia’s new National Broadband Network (NBN). It is also connected to AARNET, Australia’s high bandwidth academic and scientific research communications network. The aim of the Kirby SMART Farm project is to provide a practical way to show the benefits of the high speed broadband to farmers and related agribusiness companies and organisations. ‘SMART’ is an acronym for ‘Sustainable, Manageable and Accessible Rural Technologies’. Professor David Lamb is Professor of Physics and Precision Agriculture at the School of Science and Technology, UNE. “The goal of the SMART Farm is to develop a world-class whole farm ‘landscape laboratory’ as a national research facility that will also provide a platform for commercial enterprises to test relevant innovations,” he explains. “Access to broadband is a critical enabler for the increasingly data-intensive research carried out on the farm, as well as for fostering the kinds of cross-institutional collaborations that drive innovation in agriculture.” He says high quality broadband connectivity has helped the UNE team introduce farming techniques and technologies including: n Remote monitoring of soil moisture levels and environmental conditions n Low cost wireless cattle tracking systems to understand livestock activity n Improved farm efficiency via video-monitoring of key equipment n Instant high-quality communication with external experts around the world. “We’ve got livestock tracking devices – ear-tags that we can track on the web to give us a sense of how effectively our livestock are using the pasture,” says Professor Lamb. “We also have high speed video conferencing, which allows us to have conversations with our service providers, our agronomist, our vet, our mechanic – people who would otherwise have to come onto the farm to do their work. That saves time and it saves money, and allows us to get on with the business of running the farm. “With the NBN we can access data and technology that we couldn’t before. And technology like soil moisture probes all over the farm give us a sense of whether we are applying fertiliser as the ground will allow it.” THE BENEFITS OF CONNECTIVITY Professor Lamb says farms are not only workplaces, they are a place of family life. “Being connected to the outside world offers a whole range of benefits – access to a wonderful array of learning resources for children, access to friends through videoconferencing and of course online retailing. “Everything people in the city take for granted can now be enjoyed on our farms. That means happy families and happy businesses. The majority of Australia’s farmers are Mum and Dad businesses. To get the best opportunities and maximum productivity, they need to be connected to the rest of the world. That’s what the NBN brings.” Professor David Lamb on the Kirby Smart Farm

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CSIRO and UNE scientists have created a live map of soil and environmental conditions from data gathered from 100 local sensors and two local weather stations at the farm. Sensors monitor soil moisture, temperature, electrical conductivity and air temperature and the weather stations measure air temperature, humidity and pressure, wind speed and direction, rainfall and hail, as well as solar radiation. For farmers, this kind of vital information can be used for decision-making about when to fertilise, irrigate, sow seed or move cattle. The sensors provide the ‘big data’ that helps scientists answer big questions about how things work at the sub-paddock scale. “The cost per unit for soil moisture sensors and wireless networking hardware is steadily going down. We are looking to a future where farms will be the ultimate Internet of Things,” says Professor Lamb. The Internet of Things (IoT) refers to the use of sensors to monitor and manage activity on any connected system. The technology is being used in an increasing number of industries, with agriculture one of its major potential areas of growth. The Kirby SMART Farm team is also evaluating technologies ranging from satellite images to drones and on-ground sensor clusters that enable monitoring of the growth of plants in natural environments with unprecedented detail and accuracy. Professor Lamb says access to broadband is critical for improving productivity on Australian farms, and researchers are also exploring high definition videoconferencing for the delivery of a range of services, including training. “We are measuring many attributes of landscape and animals, building key farm management points of decision making and intelligence gathering technologies. Everything on the farm will be connected to the outside world and integrated into UNE’s teaching and research – our aim is for it to be a virtual lab that everyone has access to.” A LARGER STRATEGY The Kirby SMART Farm is run as a commercial operation, as well as being a test site for new technologies for farmers. It is a key component of the CSIRO’s smart farm strategy, as part of its ‘Sustainable Agriculture Flagship’. The strategy also includes a partnership with the Cooperative Research Centre for Spatial Information and Taggle Systems, which is evaluating systems for monitoring cattle behaviour from computers and mobile devices. One project is exploring the use of GPS tracking devices on sheep and cattle, and another is testing new airborne sensor technologies to control fertiliser application from crop-dusting aircraft. CSIRO has released a major report into the subject: ‘Smart Farming: Leveraging the Impact of Broadband and the Digital Economy’. It has established another smart farm, a ‘digital homestead’, at CSIRO’s Lansdown Research Station near Townsville in Queensland, specialising in developing technology for northern Australia’s massive beef industry. That project is integrating disparate sources of information from on-farm sensing of soils, vegetation, livestock and the environment – as well as from external sources such as climate forecasts and market information – into a simple and usable cloud-based decision support systems for beef farmers and their advisers. Another CSIRO program, Sense-T in Tasmania, is looking at how to scale local sensor networks into a state-wide federated intelligent sensor system where data can be easily shared and turned into valuable services. The Sense-T project is aggregating historical and spatial data with real-time sensor data from across Tasmania, with an initial focus on agriculture, aquaculture, dairy, beef, viticulture and irrigation.

The CSIRO report says these and other projects are exploring some of the emerging opportunities and drivers for adoption of digital services for the agricultural and related food sector, including: n Integration of sensor data and related digital services into vertical supply chains to create efficiencies and innovation in processing, distribution and marketing n The increasing focus by agribusiness companies on using digital services to optimise supply chains and complement their traditional focus on physical products and processes n Biosecurity and food safety initiatives that will increasingly use agricultural sensor data for early detection and monitoring of incidents. The report says Australia’s agricultural and upstream service and processing industries face a range of new opportunities and challenges. “There is growing global demand for food and the National Food Plan has scoped the opportunity for Australia to increase the value of its agriculture and food related exports by 45 per cent by 2025. “In order to realise this opportunity, Australia needs to increase its level of innovation and improve productivity in the agribusiness sector. It needs to do this through better use of its finite resources through the adoption of more environmentally sustainable farming practices. This situation requires that Australia’s rural sector must make a step change in its productivity.” CSIRO’s Sustainable Agriculture Flagship has set a national goal of increasing productivity in the sector by 50 per cent by 2030, while reducing net carbon emissions per unit of food and fibre by at least 50 per cent over the same period. “The rollout of Australia’s next generation broadband network and the growing impact of the digital economy through the adoption of smart digital services has the potential to help the rural sector meet its productivity and sustainability challenges,” says the report. “While computing and sensor technologies have been used on Australian farms for the last two decades, adoption has been uneven and the full potential unrealised. Through the digital economy, there is a confluence of developments that will help transform the effectiveness and ability of digital services to drive innovation.” THE FUTURE OF AGRICULTURAL TECHNOLOGY The farmer of the future will be a technologist. Digital technology will transform Australia’s agricultural industry, with the Internet of Things and fast and reliable broadband becoming key enablers in making accurate information more readily accessible and critical business decisions simpler and more objective. The technology will help farmers realise the productivity and efficiency benefits that come from remote monitoring and management of farm operations, ushering in an era of ‘precision farming’ with massive efficiency improvements and the provision of energy, effort and resources where and when they are needed. Improvements in water management alone will make a vast difference. Water is a most valuable commodity in Australia. Most farmers spend a lot of their time visually inspecting water bores, tanks, troughs and other sources of water. This vital but essentially unproductive task can take hours in a day. Technology means that this is no longer necessary. Sensors will allow data on water levels to be sent to applications where farmers can instantly see what is happening in real time, or have alerts sent to their mobile phone. This is a massive time saver. Another example is the efficient use of fertiliser. Most farms apply fertiliser

on a universal basis, without knowing whether the entire crop requires it. Soil sensors could be sending real time soil information that can be combined with weather and genetic data to provide agronomists and farmers with granular details to more accurately make decisions on fertiliser requirements. “We are coming to a time when farmers can make the bulk of their decisions based on information gained from the virtual world,” says Professor Lamb. “Farmers have been collecting information manually for generations by travelling across their properties and making observations, collecting raw data over periods of time. Placing sensors at these important and often critical observation points changes the game completely.” The technology now exists to collect the data, and the analytical tools exist to effectively analyse this information, detect trends and provide insights, allowing for early intervention for adverse events and more precision based business decisions. But as with all technology, it must be used effectively. The data must be presented in a usable manner, providing practical insights that ensure greater efficiencies. That means that all aspects of the information lifecycle need to be addressed – from the data gathered through analytics to its presentation. Farms and farmers that do not embrace these new technologies will be left behind. Agriculture may be the world’s oldest industry, but it cannot succeed without the newest technologies.

Australia’s National Broadband Network In 2009 the Australian government announced a high-speed National Broadband Network (NBN), covering the whole country. Heavily populated areas would be connected via fibre optic cable, with rural and more sparsely populated regional areas connected by high speed fixed wireless or two NBNdedicated satellites. After a change of government in 2013, following an election in which the cost and rollout schedule of the network became a major issue, the new centre-right Coalition government announced that much of the ‘fibre to the premises’ (FTTP) component of the network would be replaced with slower but easier and cheaper to install ‘fibre to the node’ (FTTN) technology. In the major cities, existing but underutilised HFC (hybrid fibre coaxial) cabling, initially installed in the 1990s for pay TV, would also be used. But the changes did not significantly affect the fixed wireless and satellite components of the network, which between them will cover around seven per cent of the Australian population, and the great majority of farms and remote areas. The fixed wireless will use a variant of the 4G technology used for mobile phones, running at around 25-59 Megabits/sec (download) and 5-20 Megabits/sec (upload). The dedicated ‘Sky Muster’ satellites will offer services at around the same speed. Both the fixed wireless and satellite systems will require the installation of an antenna on the premises, which will be provided by the NBN as part of the government’s universal service commitment, where no user has to pay more to connect. It will mean a massive increase in broadband connectivity for rural and regional Australia. The entire network is scheduled to be completed by 2020.

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See the future with Agbots

he market for robotic technologies is rapidly growing as robots become cheaper, more adaptable, easier to program and capable of learning and switching between tasks. Yet despite robots becoming more affordable and more powerful than ever before, there are surprisingly few of them. Professor Peter Corke, Director of the Australian Research Council (ARC) Centre of Excellence for Robotic Vision, explains why: “There are whole industries where robots continue to have little impact because they can’t see and adapt to their surroundings. Without vision, robots can’t operate reliably over long periods of time in complex unstructured environments like farms, where tasks such as fruit picking and weed spraying require complex navigation and manipulation.” “The goal of our Centre is to undertake the science, and create the technologies, that will allow this next generation of robots to see using cameras and advanced computer vision techniques to understand their environment, adapt to change and be able to cooperate effortlessly with human co-workers.” In the near future, Australia will need to face the challenges of a changing climate and a growing, ageing population. Productivity growth due to robots can improve people’s lives, lift living standards and create wealth. According to Professor Corke, “We expect robots to help provide solutions to many challenges, particularly in agriculture, where labour shortages and growing demands for food must be met in the context of the community’s environmental expectations. Our research enables robots to visually and reliably perceive native flora and fauna, crops, weeds and pests in varying lighting, weather and seasonal conditions. “Our vision for the farm of the future is of fields tended by agricultural robots, or ‘AgBots’ – small, autonomous and energy efficient machines that can weed, fertilise and control pests and diseases, while also collecting valuable

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data that can be analysed to improve farming practices.” Robotic Vision is a key component of QUT’s agricultural robot (AgBot II) supported by the Strategic Investment in Farm Robotics (SIFR) program, funded by Queensland’s Department of Agriculture and Fisheries (QDAF). AgBot is an adjustable 1.4m high robot that was recently in the field undergoing trials for autonomous classification and destruction of weeds using chemical, mechanical and thermal methods. AgBot uses cameras to provide the visual data to both navigate and to conduct image processing for detection and avoidance of obstacles during operations. Cameras are also used for weed detection and classification as well as to control variable rate technology for fertiliser application. Economic modelling shows robotic technology can reduce weed management operational costs by 90 per cent in terms of energy, labour and improved chemical delivery. “Over the lifetime of our Centre the computing power to cost ratio is likely to increase by a factor of 1000. Cameras will become cheaper, networking bandwidth will increase, the cost of memory will fall and the world population of robots will grow,” Professor Corke says. “Vision will become the sensing modality of choice for real world robotic projects, and we are well-positioned to deliver the breakthrough science and technologies that will create a new generation of robots that can visually sense, and understand, complex and unstructured real-world environments.” The ARC Centre of Excellence for Robotic Vision is one of many Centres funded via the Australian Research Council. The ARC also funds several other Centres of Excellence working to improve Australian agriculture through innovation. The ARC Centre of Excellence in Plant Energy Biology at the University of Western Australia is investigating a novel approach to improve sustainable yield by optimising the overall efficiency of energy capture, conversion and use by plants. In Canberra, researchers at the ARC Centre of Excellence for Translational Photosynthesis at the Australian National University are developing advances in photosynthesis, crop bioengineering, plant phenomics and computational tools to realise increased and sustainable crop yields. The ARC Centre of Excellence in Plant Cell Walls at the University of Adelaide is investigating the central role of cell walls as renewable sources of transport fuels, as functional foods to improve human health and as a source of raw materials for industrial processes. At these ARC Centres, researchers are opening new routes to improvements in agricultural productivity that will underpin our future food security. The ARC Centres of Excellence scheme funds large scale research programmes over a period of seven years allowing researchers to network, collaborate and work closely with partners across academia, government, business and industry to achieve important outcomes.

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How hi-tech imaging of livestock works from paddock to plate Farmers will soon have new ways of raising prime beef that will better satisfy market requirements and meet consumer demand, writes F IO NA MCGILL.

Photograph by Peter Loneragan

he University of Technology Sydney (UTS) is developing an artificial intelligence (AI) system able to give an objective assessment of animal conditions to guide livestock producers as they prepare their herds for market. Robotics expert Dr Alen Alempijevic, a senior lecturer in the Faculty of Engineering and IT at UTS, is developing technology that uses inexpensive, off-theshelf cameras to analyse cattle as they pass through a yard. Sensors operating at 30 frames per second capture 3D images of each cow’s fat and muscle deposits, which are then used to calculate an accurate “condition score” for each beast. A beef producer could then use this analysis to decide, for example, the nature and duration of a feeding regime to bring an animal to prime condition, or how to manage their breeding program. The technology could also be used by saleyard buyers and meat processors when selecting live animals. Dr Alempijevic has now received funding for his research through 2020 under a $4.8 million Federal government grant awarded to Meat & Livestock Australia (MLA). The next stage of his work will include monitoring live animals and carcasses to better understand what determines yield and product quality. Richard Apps is the research program manager at MLA, which is using the Rural Research and Development grant to finance a range of projects for the beef and lamb industries while also collaborating with the pork industry. Mr Apps, also a beef producer at Armidale (on the NSW northern tablelands), says beef and lamb producers are crying out for better tools to measure and manage their stock to hit yield and eating-quality benchmarks. When an animal at slaughter does not fall within the industry grid and Meat

Standards Australia (MSA) grading for eating quality, the loss for non-compliance can be as high as $300 per beast. “At the moment we rely on poor information from a range of different measures, and accuracy can be as low as 20 to 30 per cent. This technology could double that accuracy rate and that would mean a transformative shift in livestock management. “A novel project like this fits with our commitment to Australian red meat producers to support good science that will improve production efficiency and create better food products for our markets.” Dr Alempijevic used cattle assessors’ expertise in visually grading fat and muscle as the starting point for developing his live animal imaging device. “An animal deposits muscle and fat in different areas of the body, which results in different shapes,” he says. “Humans do not perceive dimensions accurately, but they are inherently capable of discriminating shape differences. “The next step was to turn a shape, such as muscling, into a mathematical description and assign it a value.” Using the mathematical description along with a fat measurement obtained by ultrasound and the muscle score ascribed by an expert assessor, Dr Alempijevic and his team taught their machine to estimate an animal’s condition based on the 3D shape the machine senses. “Essentially, we are enabling computers to think and reason about what they see,” he says. The start of Dr Alempijevic’s research coincided with the end of a research project run by the NSW Department of Primary Industries (DPI) that involved creating a genetically diverse herd of 230 Angus cows and their progeny. At the time, affordable RGB-D sensors capable of providing 3D mapping were just hitting the market. During the past four years, Dr Alempijevic has spent many hours in the cattle yards and paddocks of regional NSW where he has photographed tens of thousands of frames of the rear ends of purebred Angus cattle. “This technology only became sufficiently accurate, fast and affordable within the past few years, which has really spurred the research,” he says. Dr Alempijevic says his ongoing research with the NSW DPI and MLA aims to help farmers produce the product that is most in-demand from domestic and overseas consumers. “If the farmers can match what we like in terms of expectation, then we’re satisfied and they get optimum value. If there’s a tool that will assist them, it’s passing the parameters of consumer demand straight to the farmer.”

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Komatsu takes earthmoving equipment into the future with Intelligent Machine Control A global leader in the supply of advanced earthmoving equipment for the construction, mining and agribusiness industries, Komatsu has an international reputation for quality and reliability. Its commitment to innovation has led the company to develop the revolutionary Intelligent Machine Control (IMC) – a technological solution that simplifies machinery operation and offers unmatched improvements in safety, efficiency and productivity.

Komatsu’s WA200PZ Wheel Loader has parallel z bar linkage

stablished in 1921 in Japan, Komatsu employs nearly 50,000 people worldwide and has an annual turnover in excess of $23 billion. The company has over 50 years of history providing Australian customers with a complete range of earthmoving products. In the agribusiness sector, Komatsu supplies organisations with wheel loaders for material handling of grain and fertiliser and dozers and excavators for earthmoving and infrastructure projects. Komatsu’s reputation & quality machinery has seen the NSW Soil Conservation Service use its IMC dozers and excavators at the 2017 AgQuip, demonstrating how a dam can be built with Intelligent Machine Control equipment.

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UNRIVALLED COMMITMENT TO R&D Always on the cutting-edge of technology in the industry, Komatsu has now turned its attention to the future of automation across a wider range of machines and industries. Komatsu’s IMC technology originated nearly a decade ago in Japan, and has undergone significant research and development before reaching markets worldwide. IMC was debuted by Komatsu in the American and European markets around five years ago, and was introduced to Australian shores in the last 18 months. A shift away from traditional equipment manufacturing, the development of the technology reflects Komatsu’s changing brand. “Our philosophy is all about moving away from transactional selling to better understanding the customer’s needs and wants,” says Charles Wheeldon, National Manager for Construction and Utility at Komatsu Australia. “We look at our capabilities and explore how we can provide solutions in efficiency and design to make our customers more productive and profitable.” Komatsu’s global research and development efforts are driven by the principle of ‘Dantotsu’, meaning ‘unique and unrivalled’ in Japanese. This mindset has seen Komatsu invest over $800 million annually into international research and development and lead the global market in the production of intelligent and hybrid machinery. Indeed, the company produced the world’s first hybrid excavator and the world’s first autonomous haulage system for the mining industry. THE FUTURE OF AUTOMATION Komatsu’s IMC technology is designed to allow operators to focus on moving material efficiently from bulk excavation to final trim without having to worry about over-excavation or surface damage. It is currently available across a range of dozers and excavators, each featuring a fully integrated 3D Global Navigation Satellite System. In addition, all of Komatsu’s IMC machines include automated

blade/bucket control, multiple automated dozing modes, automated grade assist and automated stop control. “The Australian market in grade assist technology is fairly advanced, but up until the release of our IMC machines in the last 18 months, grade assist control has always been an after-market feature,” says Charles. The IMC technology integrated into the machines means they can follow a precise 3D design model for the earthmoving process and achieve significant improvements in safety, efficiency and productivity compared to conventional earthmoving processes. MACHINES WITH END-TO-END SOLUTIONS Komatsu has not only built machines that can automatically utilise this data, but the company is also working with businesses to capture the data from the first stage and provide an end-to-end solution for construction and earthmoving projects. Traditionally, this data was collected through human surveying, a labour-intensive and time-consuming process. Komatsu’s alternative is to use drones – thanks to a global partnership with Skycatch high precision drones – to survey large areas of land in a short time. “Having drones internally gives us the ability to offer a complete solution from a greenfield site to end of project” says Charles. “We can deliver a range of services, at a fraction of the time and cost of conventional ground based surveys.” Komatsu’s cloud-based platform allows the customer to integrate this

Komatsu’s IMC equipment is integrated to provide safety, efficiency and productivity

drone survey data with the automation of the IMC machines and remotely monitor the progress of the project. The user can check the movement of material, monitor the machines working on the project, review the schedule and decide whether additional machines are needed to complete the project on time. With the integration of technology to provide an end-to-end solution for earthmoving projects – from surveying and data collection to machinery control and material handling – Komatsu is leading the mining, construction and agribusiness industries in the development of machinery for the next generation. The company’s revolutionary Intelligent Machine Control gives customers not only the latest technology built into the machinery, but it is increasing efficiency and productivity and improving safety. Komatsu’s commitment to and investment in research and development has made them a dominant global manufacturer of unique and unrivalled machinery. The embrace of automation and cutting-edge technological solutions, as well as innovations such as IMC, will see them continue to be at the forefront of the earthmoving industry well in the future.

The PC210LCi-10 excavator increases productivity

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Aiming to be a global leader in sustainability Sustainability might be the buzzword of the early 21st century, but few agricultural industries can claim to have built a structure as comprehensive as the Australian dairy industry. The industry has achieved national and global recognition for its ‘whole of supply chain’ approach to developing its Sustainability Framework. community is demanding proof that we are doing the right thing by people, our animals and our planet.” The Sustainability Framework is the industry’s way of demonstrating that it is meeting community expectations. It is also designed to ensure dairying remains profitable and sustainable.

airy is Australia’s third-largest agricultural industry, worth more than $13 billion and employing 39,000 people. Australian dairy farmers produce in excess of nine billion litres of milk, of which approximately one-third is exported. Endorsed by industry in 2012, the Australian Dairy Industry Sustainability Framework centres on three themes: enhancing livelihoods, improving wellbeing and reducing environmental impact. It provides an overarching set of principles, values, targets and measures that inform industry practice changes that will, it is believed, ensure dairy farmers retain their social licence to operate. In 2013, using baseline data gathered over the previous year, 11 targets with 35 measures were set for 2020. These benchmarks focused on profitability, community resilience, OH&S, skills, product safety, nutrition, animal care and environmental impact. “We recognise that sustainability must be at the heart of everything we do,” says Framework chair and dairy farmer, Chris Griffin. “Increasingly, the

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RECOGNISING THE NEED FOR CHANGE The decision to initiate the Sustainability Framework reflects both recognition of the need for change and desire to ensure the industry could retain control of its own destiny in the face of mounting external pressures. The whole-of-industry approach was initiated by the Australian Dairy Industry Council which draws together Australian Dairy Farmers representing milk producers, the Australian Dairy Products Federation representing manufacturers and processors and Dairy Australia, the industry’s service delivery organisation. Collectively they cover the extended dairy value chain from production to manufacturing, retail and packaging. “It’s really about cooperation in the best sense,” says Helen Dornom, Manager Sustainability at Dairy Australia. “It has to be primarily ‘carrot’ and very little ‘stick’ if it’s going to become a well-integrated element of industry progress. Our best weapon in making advances is informed, inclusive and frequent consultation.” The development and ongoing management of the Framework is driven by Dairy Australia in consultation with industry representatives and other stakeholders including customers, retailers, government, regulators, natural resource management groups and leading interest groups. Initially, the process enabled the industry to establish a platform for changing practices where needed and allocated itself reasonable time to do so. Practice change in agriculture often involves modifications that can take seasons or generations to take effect. “As the demands on dairy producers and processors to improve performance and report on sustainability intensify, retailers, customers, government and consumers are all attempting to define ‘sustainability’ from their own perspectives,” says Dornom. “We decided it was essential for us to build a sustainability framework that would meet these demands in such a way that it maximises the long-term prospects for the dairy industry.”

A GUIDE FOR PROGRESS Four years down the track, the Sustainability Framework has racked up an enviable record of achievements. Perhaps the most telling of these is the engagement of stakeholders from all parts of the industry. “There is little doubt the Sustainability Framework has achieved wide acceptance within the industry as a guide for progress,” says Griffin. The annual Progress Report has become the primary instrument for communicating economic, social and environmental performance to both stakeholders and the community. Each year’s report is a barometer of progress against the 11 targets and 35 measures, indicating where change is on target and where extra focus and attention is required. “Through our annual reporting cycle we follow a process of ‘report, review, refine and revise’,” says Griffin. “This ensures the framework continues to be fit for purpose and that our targets are responsive to issues the community expects us to address.” As a result of the shifting landscape a detailed review was undertaken during 2016. It highlighted the need to provide greater focus on health and nutrition, animal health and welfare, climate variability and water security, profitability and ethical investment and food waste. The findings help the industry stay up-to-date with the issues that matter most to its stakeholders.

Dairy farmers are contributing similarly to reducing their environmental impact by ensuring waste water does not run off into waterways. More than half of the nation’s dairy farmers now have nutrient management plans with a similar number having invested in automated irrigation to improve water use efficiency. The industry is on-track to achieve the 2020 target of 80 per cent on both these measures. Furthermore, the exclusion of stock from waterways now stands at 76 per cent. There are other areas where the industry’s performance has declined, such as the proportion of people who recognise dairy as a quality product, which slipped to 69 per cent from a baseline of 72 per cent. “It’s not always going to be a smooth, upward trajectory,” says Griffin. “We recognised that from the beginning but we made a commitment to report our progress transparently.” Community attitudes to the treatment of farm animals have changed in recent decades. There have been numerous high profile incidents in other livestock industries. To date, the dairy industry has been spared a major incident but the Framework endeavours to anticipate community concerns by encouraging practice change in potentially sensitive areas. Once a routine procedure on dairy farms, calving induction is being progressively phased out. 88 per cent of farmers now report having ceased using induction, a jump of eight per cent from the previous year. Similarly, 85 per cent of dairy farmers do not dock the tails of their animals (an improvement of five percent from the baseline data), while 63 per cent of dairy farmers disbud calves prior to two months old. In addition, 95 per cent of farmers now have a strategy to reduce and manage lameness in their cows. “There are other areas where further progress is needed, such as increasing the proportion of dairy farmers who are aware of, and implement, the recently agreed standards for animal welfare,” says Griffin. “Currently, awareness stands at 56 per cent. Our target for 2020 is 100 per cent.” Partly proactive, partly protective, the Sustainability Framework increasingly underpins and defines industry wide progress. It is all the more impressive that these achievements have been made through the entirely voluntary cooperation of farmers.

INDUSTRY WIDE ACCEPTANCE The breadth of the program is reflected in several recent highlights. These include the substantial contribution made by the dairy industry, through its existing trading relationships, in helping the government to secure Free Trade Agreements with China, Japan and Korea. These agreements will increase dairy trading opportunities and enhance farm business competitiveness and profitability. The amount of waste being sent to landfill is a major community concern and a significant environmental management issue. Remarkably, Australia’s dairy manufacturers have reduced the intensity of waste sent to landfill by 46 per cent since 2011. This achievement already exceeds the Framework target for 2020.

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Agriculture: how the keyboard replaced the plough HOLGER MEINKE, head of the School of Land and Food at the Tasmanian Institute of Agriculture, University of Tasmania, discusses the rise of technology in farming and the concept of systems agriculture.

ike it or not, without agriculture few of us would survive. Agriculture underpins all economic growth and development; without its development over 10,000 years ago the creation of our civilisations would not have been possible. It was an astounding, transformational shift in human behaviour, and provided the foundation upon which other sectors of our economies could be built. Suddenly two people could feed more than just themselves, creating the division of labour and enabling developmental creativity at an unprecedented rate. While most people would readily recognise and acknowledge the sophistication and strength of the science of agriculture, the practice of agriculture (that is, farming) still has an undeserved image of muddy boots, rusty tractors

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and unskilled, hard labour. This myth must be comprehensively dispelled if we are to successfully tackle the food security and sustainability challenges that lie ahead of us. Following the science-based, green revolution of the 1960s and 70s another, quieter revolution is fundamentally transforming the practice of agriculture. The green revolution gave farmers access to sophisticated inputs, such as hybrid seed and mineral fertilisers, without requiring additional skills at farm level. Using these technologies did not require farmers to fundamentally change their farming practices; this is no longer the case. Modern farmers operate businesses that are highly knowledge-intensive. They can no longer rely on single, transformational innovations like the sort that powered the green revolution of the 1960s and 70s. Norman Borlaug’s contributions to agricultural science and plant breeding resulted in high-yielding, disease-resistant crops that are credited with saving approximately one billion people from starvation. Known as ‘the father of the green revolution’, Borlaug and his colleagues managed to find very effective technological fixes to overcome serious resource limitations. Much research, thinking, knowledge and insight went into the creation of these technologies, resulting in an unprecedented increase in food production. Yet the application of these technologies was relatively simple, and therefore not much additional knowledge was required for their deployment at farm level. Today’s challenges to our agricultural and food systems are different. This time it is not only about increasing yields per area, but also increasing productivity without using additional resources or causing negative environmental or social impacts. Today’s farmers are confronted with multiple resource constraints such as increasing pressures on water, land and energy resources as an expanding global population changes its tastes and preferences and requires more food. Our farmers not only have to excel at what they are traditionally very good at – namely growing crops and raising animals – they also have to be astute financial managers, excellent stewards of our landscapes, highly computer literate and technologically savvy and have an understanding of their legal responsibilities as managers of physical and human resources – all while managing increasingly complex enterprises. For the first time in our history, more than half the global population lives in cities rather than rural communities. Increasing urbanisation means there are more people competing with agriculture for access to land, water, capital, labour and infrastructure, particularly across Asia where over half of the world’s popula-

tion now lives. Another result of these demographic changes is that the increase in the demand for agricultural produce is projected to rapidly exceed supplies, putting additional pressure on the environment and the global food system. The potential social consequences of these pressures were captured by English parliamentarian Lord Cameron of Dillington who, discussing Britain’s food security concerns in the early 2000s, quipped “We are all only nine meals away from anarchy”. The ‘nine meals’ is substantiated by estimates that most Australian households only hold sufficient food for 2-4 days; any disruptions to our supply chains would quickly lead to significant and foreseeable social unrest. Even with policy makers and agrifood companies spending considerable thought and effort on the logistics and management of these supply chains, all such efforts are void unless the agricultural production at farm level is secure, profitable and reliable. As a consequence, modern agriculture has become a knowledge-intensive sector of considerable social relevance. For instance, Australia’s agriculture currently feeds approximately 60 million people worldwide, roughly 2.5 times our country’s own current population. The pre-farm gate contribution of agriculture to Australia’s GDP is estimated at around 2.5 per cent, considerably higher than most other highly developed economies. A theoretical upper limit of Australia’s capacity to supply food with current technologies suggests a possible threefold increase over current production volume. This means that at maximum production, Australia could feed up to 3 per cent of the world’s population – an important contribution, but hardly the ‘food bowl’ promulgated by some. Realistically, Australia could more than double its real value of annual agricultural exports by 2050, resulting in an additional $670 billion in revenue over the next four decades. To achieve such growth in a way that is economically, socially and environmentally sustainable will require vision and foresight. This is where agricultural systems thinking, augmented by computer simulations of agricultural systems, comes in. Systems thinking was pioneered by scientists such as C.T. de Wit in the Netherlands and led to the development of the first agricultural simulation models in the 1950s and 60s. Yet it is only fairly recently that these models have become part of everyday decision making at farm and policy level. The systems thinking that underpins the development of these models has already been transformational and led, for instance, to the global adoption of reduced, minimum or no-tillage practices that are now regarded as fundamental components of sustainable agriculture. The plough, which has been an essential tool for the practice of agriculture for many centuries, is increasingly being replaced by the keyboard. Agricultural systems are complex, adaptive systems with three key characteristics: (i) order emerges rather than being predetermined; (ii) the history of the system is largely irreversible, and; (iii) the system’s future can only be assessed probabilistically rather than deterministically predicted. Cause and effect relationships become increasingly intangible as a system becomes more complex and open. Empirical approaches based on direct experimentation on real systems quickly reach their limits in terms of complexity and time required. This is where good simulation models can help; the approach has been demonstrated in many laboratories around the world. The models’ real usefulness stems not from their ability to predict the outcome of management interventions, but rather in their power to foresee the likelihood and severity of consequences that might arise from a combination of climate, soil, plant, animal and human interactions. While the difference between such uses might appear subtle, it couldn’t be more profound. Predicting an outcome transfers all power to the person making the prediction (usually a scientist), while foreseeing likelihoods and consequences empowers actors to choose and actively create the desirable future they envision

while avoiding undesirable outcomes. The importance of such empowerment cannot be overestimated. When resources are scarce and in high demand, we need tools that facilitate dialogue and help us to navigate the messy space of contested goals, values and outcomes. This is where a foresight approach underpinned by good, quantitative modelling can help. Using computer models we can ask the ‘what if’ questions that underpin scenario planning. We can investigate agricultural practices and resource uses we would never dare to do in real life because they are considered too risky. This provides us with benchmarks and ‘innovation platforms’ that lead to engagement and discussion between farmers, policy makers and scientists. Everybody learns as a result of this process, and in many cases partial solutions are identified and negotiated where previously none were in sight. In Tasmania for instance, governments and farmers have invested over $500 million in new irrigation infrastructure. When all the planned irrigation schemes are fully operational, more than 150 gigalitres of new water will be made available for irrigation. This adds about 20 per cent to the total amount of water used for irrigation in Tasmania, a state where irrigation already accounts for approximately 60 per cent of the gross value of agricultural production. New irrigation infrastructure built on such a scale contains significant risks and opportunities alike. Well-documented problems associated with irrigation (such as erosion, salinisation and over-exploitation of water resources) must be avoided, while the use of these new water resources must lead to increased profitability and productivity of Tasmania’s agricultural landscapes. To this end the Tasmanian Institute of Agriculture, a joint venture between the Tasmanian Government and the University of Tasmania, developed an agreed-upon strategy for research and development that would increase the economic and social value of irrigation. The project established innovation networks across the public and private sectors, and has been recognised as an innovation success story by the Organisation for Economic Cooperation and Development (OECD). It involved collaboration between government, regulators, academics, the public, businesses and water institutions. Together, these networks imagined what an agriculturally driven economic revival of the island state might look like, what future would be desirable, what should be avoided and what the development pathways would look like and entail. Many of these discussions were informed by modelled data. The result was a clear set of research priorities that needed to be addressed in order to stay on developmental pathways that are sustainable in every sense: economically, socially and environmentally. And while this exercise of foresight has not provided answers to all of Tasmania’s questions, it has brought together disparate groups of stakeholders motivated by common causes: advancing the prosperity of the island, developing social capital and establishing a broadly-recognised social licence to operate. The process has yielded agreement on priorities, partial solutions to some problems and a renewed confidence that even some of the more intractable problems in agricultural development can be addressed through a willingness to engage, respect for the perspectives and values of others and innovative technologies that help in drawing such communities together. Such ‘innovation platforms’ can facilitate meaningful and outcome-oriented dialogues between scientists, farmers, policy makers and agribusinesses. They benefit from systems analytical approaches that provide simulated data for scenario development. Science and practice are critically important, but they need to be augmented by good, socially integrated processes in order for modern agriculture to advance. Current developments in Tasmania are an example of how this approach can be successfully applied.

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High points of Australian scientific research 1903

1926

WHEAT BREEDING A doctor from England, William James Farrer moved to Australia and bought a farm at Lambrigg in New South Wales in 1886. Noticing the devastating effects of fungus striking crops, he sought to develop disease-free, high-yielding wheat. At Lambrigg, Farrer cross-pollinated, devised and improvised hundreds of crossbred plants, and selected the best new varieties produced from these small experimental crops. In 1898, he was put in charge of government research conducted on wheat and successfully developed droughtresistant, high-yielding, early-maturing varieties – such as Bobs, Florence and Federation – that suited Australia’s harsh conditions and were unaffected by rust fungus. The breeds that Farrer developed greatly impacted wheat growing in the country, with a four-fold increase in the state of New South Wales between 1897 and 1915. Wheat yields and quality improved across the country and wheat was able to grow in areas that were previously perceived as too dry. Many of Farrer’s varieties also spread to other wheat-growing countries, gaining popularity in commercial production.

PRICKLY PEAR CONTROL Introduced to Australia in the late 1770s, prickly pear was planted in a few small areas of New South Wales and Queensland. Following the flood of 1893 it rapidly spread to larger areas, rendering millions of hectares of rural land useless for agriculture. The plant proved so difficult and costly to remove that enormous areas were simply abandoned by owners and a special board was formed to combat the challenging weed. The prickly pear moth (cactoblastis cactorum) was brought over in 1926 from the pear’s native home in the Americas. Upon hatching, the caterpillars live and feed inside the skin of the plant, effectively destroying it. Following mass rearing of the moth through a breeding program established in Brisbane, 10 million eggs were distributed across Australia in 1926, and a further 2.2 billion eggs released between 1927 and 1931. By 1932, almost 7 million hectares of land previously infested with the plant was made available to settlers. The prickly pear moth has been keeping prickly pear under control almost entirely by itself to this day.

1950 RABBIT BIOLOGICAL CONTROL (MYXOMATOSIS) In 1859, just over 20 rabbits were released in Geelong, Victoria by a wealthy grazier keen on the sport of hunting. Within just a few decades, the rabbits populated 70 per cent of the country’s landmass – the fastest invasion by a mammal anywhere in the world. By the 1920s, Australia’s rabbit population was estimated to be 10 billion. The rapid caused massive damage to the agricultural sector, as well as native flora and fauna. In 1950, the biological control agent Myxoma virus was developed by CSIR (CSIRO’s predecessor) and introduced to Australia’s mainland. Spread by mosquitoes, most rabbits die within 10 days of contracting the virus. It was the world’s first successful biological control program of a mammalian pest and within two years of its introduction, an estimated $70 million was recovered from the wool and meat industries.

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1957 SIROSET WOOL PROCESSING In the 1950s, the Australian Wool Board collaborated with CSIRO to develop new techniques in wool processing that would help Australian wool fabrics remain competitive with the synthetic fabrics common in the international market. As polyester was gaining demand for its heat-set qualities (that allowed permanent creases and pleats on fabric), scientists began looking to develop the same application for wool. A team of scientists led by Arthur Farnworth at the CSIRO Division of Textile Industry in Geelong researched and developed the SiroSet process, which involves chemically altering the structure of wool fibres so it can be set with heat, allowing the permanent pleating of wool fabrics. SiroSet was so effective that it was rapidly adopted worldwide and is still used today.

1958 TRANSGENIC SHEEP Dr Helen Newton Turner proved in 1958 that it was possible to select sheep for the heritable ability to produce multiple births, defying numerous geneticists. Originally an architect, Turner became one of the world’s leading authorities on sheep genetics through her work with CSIRO. Her research radically changed Merino-sheep breeding in Australia, and created a better understanding of reproduction in all animals. Turner’s twinning experiments (which involved breeding twin rams born as triplets or quadruplets, with twin-breeding ewes) proved that big increases in lambing rates were possible, providing graziers with more sheep for sale and a chance to genetically improve their flocks. Turner’s time at CSIRO (from 1956 to 1973) pioneered techniques that now form the basis of most sheep breeding in Australia. For her work, Turner was granted numerous honours and awards, including election as an Officer of the Order of the British Empire in 1977 and an Officer of the Order of Australia in 1987.

1959 SHRINK-PROOF WOOL AND OTHER ADVANCES During the same period as SiroSet, the chlorine-Hercosett process was developed to make shrink-proof wool. It involved treating wool with a soft resin before heating it, which formed a thin film over the wool surface and prevented its protruding scales from entangling and causing shrinkage. In 1959, further research led to the first production of washable non-iron woollen fabrics – the process was known as Sironising and involved a combination of SiroSet and shrink-proof treatment processes. Advances in wool processing have continued to develop throughout the years, with one of the latest wool innovations focused on sportswear. Known as Sportwool, the bi-layer fabric made from a wool and polyester combination releases moisture to the outside of the garment. The fabric’s design allows athletes to keep cool during exercise, yet warm before and after sports. Its successful production led to Australian athletes wearing the fabric during the 1998 Commonwealth Games and 2000 Olympic Games in Sydney.

1961 SELF-TWISTING YARN (REPCO SPINNER) Physicist David Henshaw invented an entire new concept in textile processing in 1961. Working with CSIRO’s Division of Textile Industry, Henshaw engineered a process that sped the rate at which wool can be spun into yarn without breaking the wool or reducing the strength of the yarn. Henshaw and his colleague Gordon Walls devised a new contraption of spinning tubes and wool spinning, an operation that had remained unchanged since 1764. The result of Henshaw’s discovery was the Repco Spinner – a spinner that was smaller, quieter, used less energy and was 10-15 times faster than the traditional multi-spindle spinning frame. It increased the output of yarn from 20 metres per minute to 220 metres per minute. Later modifications of the original machine (named the SELFIL spinner) revolutionised wool knitting around the world, opening a new market for wool in commercial knitting that was previously closed because of the breakage and cost of yarns.

1989 NOGALL PEST CONTROL In the 1970s, scientist Allen Kerr discovered that a naturally occurring bacterium called K84 produced an antibiotic against the devastating crown gall bacterium. Crown gall disease attacks several plant species including raspberries, nut and fruit trees and was responsible for huge crop losses not only in Australia, but around the world. Unfortunately, K84 could transfer a copy of its own gene responsible for making the antibiotic to the crown gall bacterium, making it immune to the antibiotic. Kerr genetically engineered this DNA default in the K84 by snipping it out, and in doing so redesigned the bacterium. The modified bacterium was then manufactured and sold under the tradename Nogall. Nogall is the world’s first commercial release of a living, genetically engineered organism. It paved the way for genetically modified research that focus on giving plants built-in resistance to pests and disease. Kerr’s work on the Nogall bacterium won him the first Australian Prize for Science in 1990.

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1999 PARTIAL ROOTZONE DRYING Partial rootzone drying is an irrigation technique that was developed by Dr Peter Dry from the University of Adelaide and Dr Brian Loveys from CSIRO. The technique involves producing grapes and other fruits using half the usual amount of water. Initially tested with grape vines, the technique recommends watering plants on one half of the plant for a two-week period, then on the other half for another two weeks – this pattern is continued throughout the growing season. Despite water reaching all parts of the plant, the vine reacts as through it is drying out which results in fewer shoots and less leaf area on the vine while the fruit continues to grow. Trials have shown that even though the amount of water used is reduced by half, there is no reduction in the amount of fruits produced. On the contrary, some studies showed that the quality of the grapes and wine improved. The technique has been applied on citrus, pears and peaches with promising results, paving the way for better irrigation and higher water efficiency for the agriculture industry.

2012 HENDRA VACCINE The Hendra virus was first identified in 1994 when several horses were infected with an acute respiratory disease in the Brisbane suburb of Hendra, causing the death of 14 horses and a prominent horse trainer. Within a matter of weeks, CSIRO’s Australian Animal Health Laboratory was able to isolate and identify the infection as a new virus, one that was not reported anywhere else in the world. CSIRO announced the development of a prototype vaccine for horses in 2011 following an unprecedented spike in the number of Hendra-infected horses in Queensland and New South Wales, and launched the Equivac HeV vaccine the following year. By early 2013, scientists confirmed the development of immunity in vaccinated horses. The vaccine is the world’s first commercial vaccine for a Bio-Safety Level-4 disease agent, the most dangerous level in the world. It has also minimised the chances of the Hendra virus mutating and spreading between horses, or from human to human, and has since been recommended for all horses in Australia.

2008 BARLEYMAX™ Over 12 years of research was dedicated to developing BARLEYmax™, a wholegrain designed by CSIRO to have superior health benefits and combat cardiovascular disease, Type 2 diabetes and colorectal cancer. After finding a particular barley grain that contained higher fibre content and advanced nutritional benefits when compared with regular barley, CSIRO used a GM-free, conventional breeding program to develop BARLEYmax™. CSIRO studies showed that a range of foods produced with BARLEYmax™ as the key ingredient had a low glycaemic index and produced positive changes in bowel health. CSIRO then worked with food manufacturers to create a range of products containing BARLEYmax™, including breakfast cereals, rice mixes and bread that have been available on the Australian market since August 2009. The development and consumption of BARLEYmax™ has vastly improved the overall health of Australians and saved an estimated $17 million a year in health system costs. It has also benefited grain growers, who are able to gain additional earnings from guaranteed barley prices and expand their farm business models.

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“We need to advance the Australian mindset as to our expertise – in terms of agribusiness, food production and science – and its application to helping others. In light of the recent trade agreements, this is a necessary step to ensure we share in the growth available. This goes somewhat beyond the idea of just doing business – we need to think creatively about the opportunities and act on them.” Chris Rees, Senior Trade Commissioner Singapore, Austrade

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AgriBio: an enviable record in scientific research AgriBio, the Centre for AgriBioscience is attracting worldwide attention for its genetic research. AgriBio’s staff have produced more than 70 patents in the last seven years, and hold an impressive track record in producing valuable research and technology for the agricultural sector.

griBio is a $288 million joint venture between the Victorian government and La Trobe University. The facility is Australia’s first integrated agricultural systems biology research centre and one of Australia’s premier agribioscience facilities. AgriBio was conceived by the Victorian state government, which has a long history of contributing to animal and plant genetic improvement. It is housed at La Trobe University’s Melbourne campus in Bundoora, and this co-location has enabled ground-breaking, cross-disciplinary work in the areas of dairy genetics, grains research and plant and animal biosecurity. AgriBio was host to the Dairy Futures Cooperative Research Centre (CRC) until its conclusion in 2016, and will continue to deliver profit and growth to the dairy industry via the new DairyBio joint venture between Agriculture Victoria and Dairy Australia. The Dairy Futures CRC contributed to doubling the rate of genetic gain in Australian dairy herds, and paved the way for an entirely new approach to commercial pasture breeding. Continuing and expanding on the research conducted by the Dairy Futures CRC, DairyBio is expected to deliver gains in the order of $800 per hectare of dairy farm per year through improved pastures, and $350 per cow per year from improved herds, representing an estimated $2.5 billion benefit over 25 years at a national level. “Scientists who are now part of the team at AgriBio have been responsible for fundamentally re-shaping dairy cattle breeding in Australia and achieving massive genetic improvements,” says Professor Ben Cocks, Research Director

Genomics and Cellular Science, who is based at AgriBio. “Each dairy cow in Australia is now producing double the milk compared with 30 years ago, and on half as much land.” Agriculture Victoria – with its capabilities based at AgriBio – is a major research partner in the Plant Biosecurity CRC. Agriculture Victoria staff at AgriBio and other sites have run research programs in disease and pest management for the horticulture industry and, under a bilateral agreement with the Grains Research and Development Corporation (GRDC), have developed advanced genetic innovations for the canola and pulse industries. With 100 staff from La Trobe University and over 300 from the Victorian Department of Economic Development, Jobs, Transport and Resources (DEDJTR), AgriBio’s biggest research advantage is the ability to combine different disciplines in one facility. “Here at AgriBio we have people specialising in plant productivity, animal productivity, biosecurity and animal disease all working together,” says Professor German Spangenberg, Director (DEDJTR) AgriBio. “Our facility is possibly unique in the world in having people from all those disciplines working together.” A key point of difference for AgriBio is the specific focus on translating research to industry outcomes. The government-owned company Agriculture Victoria Services (AVS) manages Agriculture Victoria’s intellectual property, patents and plant breeder’s rights. Agriculture Victoria at AgriBio has a range of commercial partnerships with industry leaders, such as a nine-year innovation partnership with Dow AgroSciences that is focused on developing transformational technologies for improving crops. “We’ve made some breakthroughs in genetic improvement in grains, particularly around accelerated precision breeding using genomic selection and genome editing in canola and wheat,” says Professor Spangenberg. In addition to delivering research that benefits the agricultural industry, the facility also provides advantages for La Trobe University’s education systems. “We’ve got this fantastic facility that is on the La Trobe campus, and it is such a good environment for post-graduate education,” says Professor Cocks. “We can use large, industry-funded projects to provide our 60 PhD students with real-world problems to work on.” AgriBio’s unique strength – its collaborative, cross-disciplinary nature – is the result of the leading expertise and strategic support of the Victorian government. With its impressive achievements in genetic research and strong commercial partnerships, AgriBio proves that governments in Australia can play a significant role in innovation.

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Symbiotic relationship between laboratories and ag companies

Symbio Laboratories, one of the only Australianowned and operated major laboratory service providers in the country, celebrates their 20th anniversary in 2017. With a strong investment in high quality customer service, and a commitment to providing customers with the fastest turnaround times, the company continues to provide independent, high-quality analytical services to the agricultural, food and environmental industries.

eginning as an agricultural consulting firm providing services to the food industry, Symbio Laboratories realised the industry’s need for independent laboratory service providers and established their first state-of-theart laboratory in 1997 in Brisbane. “We’ve built the business largely on the back of our agricultural and food industry experience,” says Chief Executive Officer David Phillips. “Having conducted work with national organisations such as Meat and Livestock Australia, the National Residue Survey and Food Standards Australia and New Zealand, Symbio Laboratories has grown to become one of the major laboratory service providers to the food industry in Australia.”

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The company specialises in microbiological testing, residue testing, chemical analysis and research and development, conducting over 2,000 different tests within their facilities every year, and around 45,000 individual tests each week. Highly qualified and experienced staff provide customers detailed quality results with fast turnaround times. Within the agricultural industry, Symbio Laboratories provides a range of testing services across various applications including comprehensive testing for the cattle, sheep, pig, poultry, stockfeed, grain and horticultural industries. The company has one of the broadest ranges of NATA-accredited testing services, and all their test methods are based on Australian standards or recognised international references. “I think what sets us apart from our competition is that we are still privately Australian-owned and operated, and have a very strong background in the agricultural and food processing industries,” says Mr Phillips. Having that value-adding experience in the agricultural and food industry means the company understands the numerous restrictions food producers and processors experience when it comes to exporting and importing. The company was the first in the country to react and provide new testing services when the US Food and Drug Administration set new requirements for imported meat that impacted the Australian red meat export industry. “We are always reacting to what food processors, exporters and importers in Australia need at the time,” says Mr Phillips. “We ensure that we are able to provide an add-on service that is cost-effective in order for them to do what they do well, without costly disruptions. “We have the fastest turnaround times for test results – across the board – which is important for processors, especially those who find themselves holding product until they have a clear test result.” Phillips is equally proud of the research and development field at Symbio Laboratories, which has developed several frontline testing procedures for the agricultural industry. The company is also rapidly implementing new technology developed by others, such as the faecal Near Infrared Reflectance Spectroscopy that provides a measure of the dietary quality for cattle grazing tropical pastures. The company has the widest geographic distribution of food and agricultural product testing laboratories across the country, recently adding Perth and Townsville sites to their stable of existing facilities in Brisbane, Sydney, Melbourne, Wagga Wagga and Rockhampton. Within the next five years, Symbio Laboratories is set on expanding nationally and abroad.

08/SCIENCE, TECHNOLOGY AND BIOSECURITY

Family values and creativity drive iconic dairy company The largest Australian family-owned private dairy company, Bulla Dairy Foods has been providing quality dairy products made with 100 per cent fresh local milk and cream since 1910. Its success as a brand leader in the industry can be attributed to its core family values and innovation.

emarkably, Bulla is still actively managed by the same three founding families – Sloan, Anderson and Downey – responsible for the company’s establishment over a century ago. Bulla’s family story, however, begins with founder Thomas Sloan who ingeniously pioneered a new method of thickening cream by pasteurising opened cans of milk in wood-fired cop-

per. He essentially began what would be the start of many successful years of creative innovations in the iconic company. “First and foremost, we are a family business,” says CEO Allan Hood. “Apart from the three founding families, which are now in their sixth generation, we have a lot of other families in the company too – generations of fathers and sons, cousins and extended family members. It speaks to the culture of who we are as a company, and the values that we hold dear.” In an industry where competition is fierce, consumer expectation is high and trends constantly change, Bulla has adapted and evolved to meet consumer demands throughout the years. It is no small feat that Bulla remains a leader in cream, ice cream and other dairy products in Australia. “We compete against a lot of overseas players and don’t have the same access to global resources as they do,” says Allan. “So instead, we play to our strengths: fresh, high-quality milk and cream sourced from country Victoria. Unlike many of our competitors, especially in ice cream, all of our products are

manufactured in Australia.” The company’s history with Victoria, in particular the town of Colac, runs deep. Bulla’s first factory was established in East Colac in 1921, manufacturing and supplying butter and cream to Melbourne’s restaurants and retail outlets with just 15 employees. Today, Bulla employs over 500 staff in Colac and is one of the largest employers in the region. In fact, in the past 12 years, Bulla has invested over $40 million in innovation and manufacturing facilities in the town. Most notably is the establishment of its state-of-the-art Innovation Centre in 2012. “Research and development play a massive role because while we cherish the traditions of the company, we have to innovate and look at future trends to meet the demands of our consumers,” says Allan. “Innovation has always been an integral part of our success.” At any one time, Bulla has 90 projects in development, with new products exploring a range of flavour extensions and newto-market products. The innovation centre in Colac is particularly significant as it allows Bulla to conduct sensory, laboratory and manufacturing testing before hitting the main manufacturing facilities. “It essentially allows us to trial and test new products, play around with things and experiment” says Allan. “We have a really fantastic team that comes up with the most amazing products and ideas – it’s the Willy Wonka part of Bulla.” Bulla’s current product range extends over 260 varieties, with its latest products featuring Frozen Custard, Frozen Greek style Yoghurt, Ice Cream Sandwiches, Nut-Free Ice Cream (the first of its kind made in Australia) and Pure Cream. The company’s continued success is not just due to its innovation, but in crafting a genuine story that speaks to consumers both in Australia and in overseas markets. “Bulla has a great story, which we have never really told before,” says Allan. “Our recent ‘unfakeable’ campaign truly speaks to who we are – we, as a family, are an ‘unfakeable company’. We are genuine, honest and hardworking. We are not a corporate company, we are not foreign-owned – we are a 100 per cent Australian-owned family business. “The overall vision is to create a sustainable family business. My job at the end of the day is to pass on the baton to the next generation of family members.”

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Value-added foods – leveraging Australian attributes Australia enjoys an enviable and deserved reputation as the producer of safe, clean, green foods and agricultural products. PR OF E S SOR MIKE GIDLEY – Director of the Centre for Nutrition and Food Sciences at the Queensland Alliance for Agriculture and Food Innovation (QAAFI), The University of Queensland – examines how this reputation can be leveraged to develop value-added foods.

COMMODITIES AND SPECIALITIES In the export market, there are typically two categories of products supplied by the agri-food sector. The current dominant category for Australia involves large-scale primary products such as grains, animals, fruits and vegetables, or first-stage processed products such as milk powders or meat. The common characteristic of these products is that they are traded and eventually sold to consumers on a per weight basis. This makes for easy price comparisons and decisions by food manufacturers, retailers and consumers, and the commoditisation of produce. Australian

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produce can often be shown to have superior attributes to similar produce from other countries with a lower cost base than Australia. However, cost/ benefit trade-off decisions are inevitability made by food manufacturers, retailers and consumers who determine whether it is worth paying more per kilogram for Australian produce. The second category of agri-food product is that of value-added foods, which are typically sold to consumers per meal or serving rather than on a per weight basis. This results in a decoupling of weight from price and can lead to much higher margins, but must be accompanied by added value to consumers

in the form of convenience, nutrition, and/or quality characteristics. With a developing global interest from consumers wanting to know where their food comes from and a growing, newly-affluent population in many Asian and other export markets, there is an opportunity for Australia to build on its reputation as a producer of quality foods to develop added-value products. This may also lead to a redefinition of Australia’s potential regional role from being a food bowl to being a provider of high-value niche products backed by technical evidence of quality, nutrition and sustainable production processes. As there is now no limit to the amount of information that can be included in digital form with food produce and consumer products, compositional, provenance and other information can be used to support and justify premium prices. In addressing this opportunity, (at least) three platforms can be envisaged, which are discussed below under the headings of Naturally Nutritious, Uniquely Australian and Smart Selections. All of these rely on the natural advantages that Australia has: diverse land and water resources, highly efficient farming practices and the continued health of a flourishing agriculture and food research and development ecosystem in Australia. NATURALLY NUTRITIOUS The increasing prevalence of non-communicable ‘diseases of affluence’ such as diabetes, cardiovascular diseases and colon cancer, as well as the associated obesity challenge, has fuelled intense interest in the development of foods and diets to combat them. Although there is a lot of media noise and commercial opportunism in the latest diet fad or ‘superfood’, the reality is that health agencies around the world have reached a consensus that a healthy diet should be rich in plantbased foods with suitable protein sources. In addition, the total energy intake associated with these foods should be appropriate for each individual’s lifestyle (particularly physical activity and age). In order to achieve optimal nutrition within a total dietary energy cap, attention should be focused on nutrient-dense foods – particularly those with high satiety – to make it easier for people to keep within an appropriate total energy intake. Australia is a source of all of the recommended nutrient-dense foods including wholegrains, vegetables, fruits, legumes, dairy products, beef, seafood and other muscle foods. This focus on wholesome food is perfectly in line with consensus health advice, and for consumers there is often a halo effect that links safe, clean, green food with optimal nutrition. With additional dietary information that demonstrates the nutritional value of specific Australian food products, coupled with packaging that optimises convenience and attractiveness, there is currently a window of opportunity for Australia to become recognised as a preferred source of premium nutritional food products. This is the case from primary produce through to elaborately-transformed foods that maintain natural characteristics in the eyes of consumers. UNIQUELY AUSTRALIAN Building on Australia’s natural advantages, marketing food products that can only have come from Australia is an attractive aim. Two aspects of this opportunity are provenance attributes and the use of native (‘bush food’) plants and extracts. In order to justify provenance claims, it will be necessary to associate specific attributes of food products with their region of origin. This approach is very well established in the wine industry, with clear links between the growth region and the characteristics of the wine. There seems no reason why this approach should not work for other food products whose quality depends on characteristics of the environment in which they are grown.

The challenge will be to establish an appropriate language to describe the locality-specific characteristics, and support this with analytical measures of food composition that can be easily comprehended by consumers. One of the more straightforward propositions for Australian provenance in consumers’ eyes is food products made with ingredients sourced from unique native Australian plants. In addition, innovative chefs are using the distinctive tastes and aromas of native plant foods to build a uniquely Australian cuisine, and the publicity that this attracts can be a springboard for the development of value-added consumer foods. SMART SELECTIONS The wealth and diversity of primary agricultural produce from Australia has resulted in major and successful efforts to retain the maximum possible sensory and nutritional properties ‘from farm to fork’. In addition to the continuing importance of this approach, the complementary approach ‘from fork to farm’ is likely to assume a greater prominence in the future. This prediction is based on the rapid developments in measurement science, computation, genetics and other areas that are allowing researchers to determine the molecular basis for the sensory and nutritional properties of foods, from raw materials and post-harvest processing. By being able to analyse the compositional structure of particular food attributes desired by consumers, the opportunity arises for smart selections of raw materials and processing conditions aimed at delivering the required taste and nutritional attributes. This in turn may influence the choice of crops grown, as the added value associated with premium consumer foods can be shared throughout the supply chain. Coupled with naturally nutritious and uniquely Australian attributes, smart selections promise to deliver a bright future for the value-added agri-food sector in Australia.

ABOUT THE AUTHOR: Professor Mike Gidley is the Director of the Centre for Nutrition and Food Sciences in the Queensland Alliance for Agriculture and Food Innovation (QAAFI) at the University of Queensland. Trained in chemistry at the Universities of London and Cambridge, his research is focused on analysing the structural nature of the raw material of crops and plants in order to optimise the nutritional value of food products.

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Wagyu beef driving Australian cattle industry into greener pastures Wagyu meat is clearly recognised by food connoisseurs throughout the world as the best-tasting beef. Its exceptional eating quality and health benefits are transforming the Australian beef industry into the world’s number one provider of premium beef. GRAHAM T RU SCO T T, CEO of the Australian Wagyu Association, explains how this is happening.

agyu is a Japanese beef cattle breed derived from native Asian cattle. The name ‘Wagyu’ refers to all Japanese beef cattle, where ‘wa’ means Japanese and ‘gyu’ means cow. Wagyu were originally draught animals used in Japanese agriculture, and were selected for their physical endurance. This selection favoured animals with more intra-muscular fat cells, or ‘marbling’, which provided a readily available source of energy. Wagyu is a naturally horned breed and the cattle are either black or red in colour. Australian importation of Wagyu genetics occurred through the 1990s. Over 300 individual animals, along with semen and embryos, were exported from Japan through America as Australia did not have the required importation protocols. Japanese genetics exports were terminated in the late 1990s

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as Japanese farmers lobbied to protect Wagyu as a “national living treasure”. Outside of Japan, Australia has the most Wagyu beef cattle. As they can fetch a sale price at least 50-75 per cent above other beef breeds due to soaring international demand, Wagyu numbers are steadily growing at an estimated 30 per cent per annum. In the context of the Australian beef industry, Wagyu is a very niche brand representing only two per cent of the beef female breeding population. However, this is expected to change with conservative estimates of 30 per cent growth year-on-year projecting the total Wagyu herd in Australia to rise from 300,000 to over 820,000, with exports also increasing from the current 40,000 tonnes to 74,000 tonnes during the same period. Despite this rapid growth, Meat and Livestock Australia (MLA) international market demand analysis in-

dicates this level will not saturate global premium beef demand. The Wagyu product itself provides the greatest opportunities. High levels of marbling fat within the muscle structure provide an eating experience well beyond that of any other beef breed and perhaps any other protein. The low melting point of the Wagyu marbling fat provides a wonderful “mouth feel”, ensuring a unique eating experience. However, the health benefits provided by wagyu may be even more compelling. According to Dr Stephen Smith, Professor of Animal Science at Texas A&M University, the monounsaturated fatty acid to saturated fatty acid ratio runs up to three times higher in Wagyu than other beef. Wagyu is also a significant source of essential fatty acids such as Omega-3 and Omega-6, with Omega-3 having shown to protect against heart disease, arthritis, depression, Alzheimer’s and high blood pressure, as well as provide anti-carcinogenic properties. One interesting fact about the Wagyu breed is that they are extremely well domesticated, thanks to centuries of domestication in Japan. The animals themselves are extremely quiet, and they utilise the pasture feeding environment in Australia – which is very healthy and effective – as the starting point in our production and supply chain. After pasture feeding, the cattle move to a feedlot environment for longer feeding to maintain a rising plane of nutrition in order to produce its specific marbling fat traits. The Australia feedlot environment is heavily regulated with quality assurance mechanisms and certifications in place. Animals are looked after effectively and their health is maintained to a high degree, ensuring the end product is high-quality and healthy. Australian production systems in the abattoirs are also well regulated, ensuring animal welfare is maintained to a very high standard. In Australia, the Wagyu industry is promoted and supported by the Australian Wagyu Association (AWA) – a member-based not-for-profit organisation, made up of all sectors of the Wagyu supply chain. High commercial demand is driving membership growth at 20 per cent per annum, with producers keen to learn more about Wagyu and its breeding and production. The association aims to promote the Wagyu industry, support farmers and work with partners to ensure further research and development into Wagyu genetics, breeding and production.

For the AWA (and indeed the Wagyu industry in Australia), product development and marketing are the key short-term focus points. In the product development area, genetic analysis is rapidly improving so that the performance potential of the animals are better understood. Producers can then select the right genetics for optimal performance. In addition, genomic analysis is included to further assist performance prediction and optimise the use of Wagyu genetics. In terms of marketing, AWA intends to greatly expand the use of the Wagyu breed within Australia, which is already growing rapidly. With innovators and early adopters already addressed, the focus is now on the early majority. Marketing Wagyu and increasing its consumption within the domestic market provides an opportunity for product improvement in the Australian beef industry, through feedback on eating quality as well as monitoring the health aspects of Australian Wagyu. By increasing international marketing (and awareness) of the breed, we can position Australia to become the technology leader in Wagyu genetic analysis, and a leader in provision of the most high-quality Wagyu genetics to the world. By utilising Wagyu genetics, we actually have the potential to increase both the eating quality and inherent health benefits of the Australian beef product. From a consumer viewpoint Wagyu could be the perfect beef product – an eating experience which is both delicious and healthy! Australia’s international leadership in the use of Wagyu genetics provides a great opportunity for the Australian beef industry to become a world leader in premium beef production. The innovators and early adopters of this breed are big corporations with plenty of experience and capital – they have the ability to drive a large uptake of the breed and its genetics domestically. International uptake is expected to follow and Australia could potentially become the mainstream supplier of Wagyu genetics, as well as a world leader in supplying premium quality beef products. Technological innovation already thrives in the fledgling Wagyu industry, putting Australia in a unique position as an international market leader in this regard. Experimental cameras and analysis software are used to accurately assess eye muscle area, marbling percentage and fineness of marbling plus a range of other traits. In partnership with the MLA and the University of New England’s Agricultural Business Research Institute (ABRI), the AWA established new ways of analysing marbling fat content – the Estimated Breeding Values (EBVs) in the world-leading BREEDPLAN beef genetic analysis system is the first of its kind. Unlike any other beef breed, the high value of the Wagyu carcase and boxed beef encourages vertically integrated supply chains. It was Australian supply chains which enabled the AWA to uniquely capture carcase data from abattoirs and load it into the Wagyu BREEDPLAN genetic analysis. The result is the only Wagyu multi-trait genetic analysis outside Japan, which is significant, as Japan does not publicise its genetic analysis. Overall, Australia is leading the world outside of Japan in Wagyu genetic and genomic analysis, breeding, production and meat products export. Product innovation, coupled with very high commercial animal and meat premiums, is driving the growth of the Australian Wagyu industry at a rapid rate. Within that context, Australia has a truly unique opportunity globally thanks to our small population and high beef production. We have the opportunity to move our Australian beef production to a premium level using Wagyu genetics, and therefore fully optimise returns to the Australian beef industry through domestic and foreign consumption. Truly, the Wagyu breed is transforming the Australian beef industry by enabling premium quality production and delivering commercial profitability previously unheard of in such a stable and mature industry.

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08/SCIENCE, TECHNOLOGY AND BIOSECURITY

Future trends in Australian biosecurity Biosecurity means mitigating the risks and impacts associated with pests and diseases. Australia has done well, but we cannot be complacent. GARY FIT T looks at five important trends that will affect Australiaâ&#x20AC;&#x2122;s biosecurity future.

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commitment to biosecurity has allowed Australia to protect its unique natural habitats and the health of its citizens, while at the same time maintaining an advantage in primary industries. But the current status should not be taken for granted. A number of global megatrends highlight significant change and growing complexity in Australia’s biosecurity challenges, pointing towards a future where existing biosecurity processes and practices may not be sufficient. We need to think beyond the short-term horizon to consider how things may change over the coming 20 to 30 years across all areas of biosecurity. We cannot afford to be complacent. The management of biosecurity in Australia will require a step change towards smarter and more efficient strategies that are ahead of the pace of change around the world. Five biosecurity ‘megatrends’ illustrate the unparalleled change that is increasing the complexity of the biosecurity landscape. This will require Australia to significantly increase the effectiveness of its biosecurity effort through strategic investments in capability and technology, just to maintain Australia’s current level of preparedness. Biosecurity can be regarded as insurance against risk. Access to good information and the implementation of good decision making processes makes it possible to act pre-emptively, trading off the risks avoided against the costs of measures imposed. In order to be successful, this approach requires rigour in risk management and decision making to ensure that the costs of biosecurity activities don’t outweigh the benefits. At the same time, biosecurity is also an enabler. A world-leading biosecurity regime can greatly improve market access opportunities. It can also play an important role in enabling the sustainable agricultural expansion and intensification required to realise the growth opportunities that exist for our agriculture sector. And as food safety and security become growing concerns around the world, we may see future opportunities to export Australia’s biosecurity related services and knowledge. Minimising and managing risks while capitalising on the opportunities that a successful biosecurity regime presents will only be possible through a coordinated approach involving government, industry, scientists and the general community. Because biosecurity successes and failures in one area or industry are intertwined with the fate of the others, there needs to be a focus on finding common solutions in order to maximise our return on investment and resources. Importantly, any future approach needs to optimise and integrate the use of policy, science and technology and education and engagement. A balance is also required between the initiatives that help us to prepare for biosecurity threats, and those that allow us to better respond to and recover from them. There are a number of key questions that should be explored if we are to maximise the effectiveness of Australia’s biosecurity system. With growing complexity and declining resources we are on a path towards an uncertain biosecurity future. Decisions will need to be made to ensure Australia’s economy, environment and the health and wellbeing of our citizens are protected and enhanced, through a commitment to securing Australia’s biosecurity future.

Biosecurity Megatrends

A megatrend is a significant shift in social, environmental, economic, technological or geopolitical conditions that has the potential to reshape the way an organisation, industry or society operates. There are at least five biosecurity megatrends that point towards a shift in the types of biosecurity risks Australia is likely to face in the future and the way that these risks will need to be managed. The number of factors placing pressure on our biosecurity system continues to grow. We need to be prepared to respond. Trends relating to agri-

cultural expansion and intensification, urbanisation and changing consumer expectations, global trade and travel, biodiversity pressures and declining resources could lead to a future where existing processes and practices relating to biosecurity are not sufficient. Importantly, these megatrends should not be considered in isolation. They are all interrelated, and the interactions between them have the potential to lead to biosecurity megashocks. MEGATREND 1: AN APPETITE FOR CHANGE Growing global food demands are creating many opportunities for growth in

The number of organic producers in Australia increased by almost 50 per cent between 1990 and 2011-12. While organic produce currently represents around one per cent of farmgate income for Australian farmers, the revenue it delivers for agriculture is expected to grow from $655 million in 2014 to $981 million in 2019.

Australian agriculture. But rising agricultural pressures (e.g. water scarcity, pesticide resistance) are challenging the productivity of the sector. In order to remain competitive in a growing global market, we are seeing greater agricultural intensification, vertical integration and expansion into new areas. We are also continuing to see growth in niche markets (e.g. organic and bioproducts).

A Tasmanian sea urchin processing plant has recently started exporting to China, turning an Australian marine pest into a new market opportunity. Another potential future growth market is insect farming. Since 2003, the FAO has been investigating the use of insects as a valuable source of protein for animal feed and human consumption – a practice that already exists in Southern and Central Africa and Southeast Asia.

Biosecurity Implications n Australia’s ‘pest and disease free’ status will increase in importance in a growing and highly competitive global market for primary produce. n The future focus will be on productivity improvements. The way we approach such improvements could either increase or decrease the strength of our biosecurity system. n Agricultural intensification and vertical integration can create single point sensitivities in the biosecurity system. n Vertical integration requires an end-to-end consideration of biosecurity along the entire value chain. n Land-use change associated with agricultural expansion can impact on the resilience of our ecosystems. n The new biosecurity risks created by agricultural expansion will need to be proactively addressed to ensure the future viability of our primary

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industries. n Foreign investment associated with agricultural expansion has the potential to either increase or decrease the level of biosecurity risk for Australia. n As niche markets grow, we may need to consider entirely new approaches to managing pests and diseases. MEGATREND 2: THE URBAN MINDSET We are continuing to see growth in urban populations, particularly in developing countries. In Australia, a much urbanised country, city dwellers are increasingly disconnected from primary industries. At the same time, we are seeing growing consumer expectations relating to food production (e.g. organic, free-range, locally sourced). Our cities continue to encroach upon new areas of land, and peri-urban producers are a diverse group who are generally disconnected from traditional agricultural networks.

There is a growing demand for local produce and a rise in the popularity of urban farms and community gardens in Australian cities, in the belief that more sustainable produce has a positive impact on communities. Many buildings in Sydney and Melbourne have expansive rooftop gardens, and kitchen gardens are now common-place in primary schools across the country.

Biosecurity Implications n Densely populated urban areas, particularly in developing countries, can act as disease incubators and increase the risks of outbreaks of disease. n A general disconnection from primary production in Australia is leading to a lack of understanding of biosecurity issues and their impacts. n Changing consumer expectations require new and adaptive biosecurity capabilities. n The ongoing expansion of our cities is changing interactions between people, wildlife, agriculture and disease vectors, increasing risks such as zoonotic disease. n It is important to engage with peri-urban and amateur producers as part of the biosecurity community to improve their understanding of biosecurity risks and their adoption of biosecurity practices. MEGATREND 3: ON THE MOVE The number of international tourist arrivals for Australia continues to increase. We continue to see an increase in the movement of goods and vessels around the world, in line with growing global trade. We are also seeing greater movement of goods across our interstate borders. In a globalised world, bioterrorism (including agriterrorism) is a potential threat. Biosecurity Implications n Increased travel creates opportunities for infectious diseases,

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including those resistant to antibiotics and antiviral medications, to enter Australia. n Increased movement of people and goods can help to bring pests or diseases into the country that could impact on our environment or primary industries. n There will remain a need for offshore biosecurity investment. n We need to protect our biosecurity status and maintain our competitive advantage in export markets, while at the same time avoid being perceived as protectionist. n We may see the development of stronger regional and global biosecurity standards. n Online retailing is creating greater opportunities for the introduction of pests and diseases through the illegal fauna and flora trade. n The potential threat of bioterrorism requires ongoing vigilance. n Greater domestic freight movements can help pests and diseases to spread across the country.

The National Livestock Identification System (NLIS), which traces livestock from property of birth to slaughter, allows Australiaâ&#x20AC;&#x2122;s red meat industry to ensure meat quality and safety. From a biosecurity perspective, traceability solutions like the NLIS play an invaluable role in emergency disease response, allowing an outbreak to be traced, contained and eradicated faster, minimising costs and protecting market access.

MEGATREND 4: A DIVERSITY DILEMMA We have experienced biodiversity loss in recent centuries, globally and in Australia, with many species on the brink of extinction. Much of this is related to human activity (e.g. habitat loss and modification, invasive species impacts). Efforts are being made by a number of countries to preserve biodiversity and limit further losses. But a changing climate is causing shifts in ecosystem diversity, and we are continuing to see a loss of species and genetic diversity within agriculture.

An assessment of management strategies for protecting conservation-significant plants and animals in the Pilbara region of Western Australia found that the most cost-effective strategies for protecting biodiversity were managing feral animals and creating predator proof sanctuaries.

Biosecurity Implications n Significant biodiversity loss can decrease the resilience of our natural environment to pests and diseases. n The management of invasive species can be a valuable and cost-effective tool in curbing biodiversity losses. n Biodiversity can provide a number of benefits, such as ecosystem services (e.g. pollination). Understanding the interconnections between biodiversity and biosecurity may therefore prove to be a vital component of biosecurity management. n Climate change can facilitate the movement of pests and disease vectors into new areas. n The loss of agricultural diversity can create food security risks in the case of a pest or disease outbreak. n Preserving genetic diversity can help in the development of pest and disease resistant crops and animals. MEGATREND 5: THE EFFICIENCY ERA An ageing population is leading to a decline in biosecurity specialists and experienced farmers, with a lack of younger talent to fill the gaps created. Biosecurity investment does not appear to be keeping pace with the growing challenges we face. Technology and innovation across surveillance and monitoring; data and analytics; genetics; communication and engagement; and smaller, smarter devices will play an important role in addressing future biosecurity challenges. It is important to identify and address the barriers that could prevent technological innovation from delivering the efficiencies required.

In Queensland, a unique infrared and thermal camera system mounted on a helicopter is being used to detect fire ant nests. This remote-sensing technology allows large areas to be searched in a fraction of the time taken by conventional surveillance methods, with minimal disruption to properties. It is estimated that the use of this technology will save more than $24 million per year when compared to ground-based surveillance approaches.

Biosecurity Implications n A lack of biosecurity specialists and investment could limit our ability to prevent and respond to shocks. n Low cost sensors and automated systems create opportunities to better identify pests and diseases. n Improvements in data modelling and visualisation, combined with increased data availability, can improve long-term decision making. n New communication tools, as well as behavioural and social science, can help to improve the flow of information and engage the wider community including citizen scientists, in biosecurity management. n Progress in surveillance and diagnostics in the area of genetics allows for better detection and understanding of pests and diseases, as well as opportunities to breed resistant species.

n The development of diagnostic devices that are smaller, smarter and

capable of detecting a range of pests and diseases could create a step change in quarantine and surveillance activities. Issues such as poor design, a lack of funding and poor data integration n could limit the potential for technological solutions to address current and future biosecurity challenges.

The Atlas of Living Australia is a biodiversity ‘Yellow Pages’ that brings together, in real time, more than 40 million specimen records from multiple data sources hosted in museums and biological collections across Australia. It provides open source analytical tools to allow users to explore potential species distribution and impacts on biodiversity, and could prove to be a valuable data source for biosecurity management in Australia.

Megashocks The way that the biosecurity megatrends play out and how they interact with one another over the coming decades will be significant in shaping Australia’s biosecurity future. The intersection of the megatrends has the potential to expose Australia to a greater level of biosecurity risk with the potential for future ‘megashocks’ to Australian industry, the environment, or even our way of life. For example, agricultural intensification combined with greater levels of trade and declining biosecurity investment could create the conditions for a megashock for Australia’s plant or animal industries – new diseases, or new strains to existing diseases such as foot and mouth disease or wheat stem rust. None of these trends in isolation have the ability to create such an event, but the way they interact can increase both risk and impact levels for biosecurity threats. Such megashocks could involve significant, relatively sudden and potentially high impact events, the timing of which is very hard to predict. This could have significant impacts across economic, environmental or social dimensions. They can also vary in scale, from more localised or industry-specific megashocks through to those with impacts of national or even global significance. While it can be argued that Australia has so far been spared from significant biosecurity megashocks, they are not an uncommon occurrence at a global level. Australia cannot use its relatively fortunate history as an excuse for complacency in the face of growing biosecurity challenges. ABOUT THE AUTHOR: Dr Gary Fitt is Science Director of CSIRO Health and Biosecurity. He is Chair of the Science Advisory Body of the OECD Cooperative Research Program and an Adjunct Professor at both the University of New England and the University of Sydney. This article is an edited extract from the Biosecurity Futures Report, published by CSIRO in 2014.

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08/SCIENCE, TECHNOLOGY AND BIOSECURITY

The regulations ensuring Australian food safety Australiaâ&#x20AC;&#x2122;s reputation for safe food is founded on an alignment between regulatory and business objectives, writes GE OF F R E Y A N NISO N, PhD, Deputy Chief Executive of the Australian Food and Grocery Council.

ustralia has a reputation for producing a wide range of wholesome, quality food products for over 23 million domestic consumers, and many more in export markets. That reputation is built on a number of factors including a perception, and indeed the reality, that: n Australia is a large continent with diverse regional climates supporting a wide variety of agriculture and aquaculture industries; n the remoteness of Australia has spared it many of the environmental problems of more populous areas, resulting in relatively pristine food production;

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n the Australian food manufacturing sector is modern and technologically

advanced; and n most importantly, that Australia has a world class food regulatory system mandating that food offered for sale is safe. Indeed, it is the last two factors operating together that have resulted in Australiaâ&#x20AC;&#x2122;s overall food production being rated as extremely safe by world standards. The manufacturing industry in Australia is similar to that of other developed economies, being comprised of multi-nationals as well as locally

owned companies. Together they meet the needs of Australia’s multi-cultural population, manufacturing food products predominantly from Australian-grown food ingredients supplemented by imported specialist ingredients, food additives and processing aids. The industry’s turnover in 2013-14 was $97.4 billion with exports of elaborately transformed food and beverage products reaching $25.7 billion in 2014-15. With regard to the regulatory system, it too is advanced and complex, mirroring the nature of the industry. A three-tiered approach comprising corporate law, consumer law and food law mandates not only that food products must be safe, but in addition mandates business practices and corporate strategies which underpin product integrity. The food manufacturing industry meets these legal requirements through its corporate policies, business practices and technical know-how. CORPORATE LAW Australia’s corporate law requires directors and senior management of companies to act in the best interests of the company to the benefit of shareholders. A primary obligation is to create and protect shareholder value. For the food manufacturing industry, protecting the reputation of the company and its brands is paramount. Nothing can damage the reputation of a brand, and therefore sales, as quickly as a breakdown in product integrity leading to a food safety incident. This immediate erosion in shareholder value from loss of consumer trust can be quickly compounded by the costs of conducting a product recall, managing the public relations challenge and additional marketing costs required if there is a product re-launch. Meeting legal costs and fines which might result from a prosecution, or from class actions of affected consumers, can also severely damage shareholder value. The boards of directors of food companies, and their senior management, are of course acutely aware of this obligation to protect shareholder value and the impact that a food safety incident may have. Consequently, best practice is that food safety and quality assurance is included in companies’ risk registers and is routinely reviewed as a part of good corporate governance, and the audit and risk management duties of company boards. In practice, this means that boards, their chief executives and senior managers ensure that food safety and quality systems are employed throughout production, with appropriately trained and competent staff. CONSUMER LAW The second tier of regulation supporting the production of safe food is Australian consumer law. The Australian Competition and Consumer Commission (ACCC) administers and enforces the Australian Consumer and Competition Act 2010. Among the many obligations the Act imposes on businesses is the requirement that products and services are safe, accurately described and fit for purpose. This applies to foods and beverages as much as any other product and clearly, if a break down in product integrity occurs the company is non-compliant with the Act, and at risk of legal sanction. In the event of consumer harm occurring, including illness and death from food poisoning, the ACCC is required to be notified within 48 hours. The ACCC will determine if a company is adequately addressing the situation and has a range of regulatory sanctions if not satisfied, ranging from public notification of safety risks through to ordering a mandatory recall. In addition, the Competition and Consumer Act 2010 provides legal remedies for affected consumers to recover loss caused by defective products. These actions are based on strict liability, which means that there are very few

available defences. Such actions for compensation can be pursued by individuals, but more importantly can be pursued under the Act as class actions on behalf of all affected consumers, and can also be pursued by the ACCC itself as a representative action. Companies protect themselves and their directors and staff by implementing business processes and systems which not only effectively mitigate the risk of producing unsafe food, but also establish clear lines of accountability within the company. These business processes also serve to demonstrate due diligence in the unlikely event that something does go wrong and unsafe products enter the market. FOOD LAW In Australia, agreement between the federal and state and territory governments provides the basis for a national uniform approach to food law. The Australia New Zealand Food Standards Code (FSC) is developed, reviewed and amended by the binational agency Food Standards Australia New Zealand under the broad policy direction of the Australia New Zealand Ministerial Forum on Food Regulation. States and territories adopt by reference the provisions of the FSC into their food regulations. The states and territories enforce the regulations and also retain power to bring down additional food regulations in emergency situations through mechanisms and agencies which differ from jurisdiction to jurisdiction. The FSC, through the laws of adopting state and territory, places an absolute obligation on businesses that food for sale must be safe and suitable, and the additional obligation that food companies must develop and operate to appropriate food safety plans based on a preventive approach. Reflecting the modern paradigm that food regulation should be outcomes focused, rather than prescriptive, the onus is firmly on food companies to be able to demonstrate that they are, and are capable of, producing safe food. Food companies are acutely aware of this obligation under food law. They meet the obligation by developing and rigorously adopting food safety management plans. The food safety plans include verification steps which demonstrate the food coming off production lines is safe. Although the complexity of food production varies considerably with the nature and size of the food business, the fundamental principles and approach to assuring food safety are the same. State and territory enforcement agencies conduct regulatory audits periodically, with the frequency determined by the nature of the business and a risk assessment. In addition to compulsory food safety regulations, a large number of private standards have been developed which incorporate requirements for safe food production. Retailers, quick service restaurants, food service companies and major manufacturers commission a large number of audits of their suppliers for compliance with these private standards. The overlay of private standards and the standards developed by downstream customers reinforces and amplifies the Australian food industry’s commitment to food safety. Furthermore it reflects the fundamental truism that food safety is a common objective of both regulators and business. Safe food regulation protects consumers; safe food production protects consumers and protects brands. Protected brands become trusted brands, which is the critical underpinning of successful food and beverage manufacturing businesses. Thus the objectives of food regulators and businesses are perfectly aligned when it comes to food safety. The excellent reputation for safety and quality of Australian food products is founded on that alignment with Australian consumers – and consumers of Australian products overseas – being the ultimate beneficiaries.

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Australiaâ&#x20AC;&#x2122;s Education Sector How Australian secondary and tertiary institutions prepare students for careers in the industry and the game-changing agricultural research they conduct.

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09/AUSTRALIA’S EDUCATION SECTOR

How Australia’s universities teach and research agriculture Beginning early in the 20th century, Australian universities have a long history of educating and researching in the field of agriculture. But as the modern world of farming now incorporates so much more than just agricultural practices, so too does study in agriculture offer knowledge and skills applicable beyond the paddock.

ducation in agricultural science at university level in Australia commenced at the University of Melbourne in 1905 and the University of Sydney in 1911, with other universities gradually introducing courses over the next 80 years. Yet despite this long history, it took a long time for universities to reach the areas where agricultural study would have the greatest effect: rural and regional Australia. Up until the creation of the University of New England (UNE) in Armidale in 1954, all Australian universities were located in metropolitan areas and the provision of agricultural education was only available to regional students through rural-based colleges. But following UNE’s establishment there was something of a growth spurt for universities in regional areas, with nine such institutions being formed by the 1980s. While these rural universities are naturally major centres of agricultural study given their proximity to agricultural industries, they are not alone in offering education in the sector. Today in Australia there are 29 institutions offering various tertiary qualifications in agriculture. 23 of these are at the level of a Bachelor’s Degree or above, and 19 universities offer postgraduate study in the field. While the study of agriculture is by nature very specialised and often skillsbased, it incorporates a diverse knowledge base that goes beyond agricultural science and practice. In the modern world, agricultural graduates may need to utilise business and economics skills in order to manage farm finances and run a business, digital and IT skills to ensure proficiency in farm technology and marketing and communication skills to promote their product or business. Even skills learnt in disciplines such as engineering and medicine can now be readily deployed in an agricultural setting. Of course, the more traditional agricultural courses such as animal or crop science, horticulture, farm management and plant genetics are still widely available. Meeting the industry demand for skilled, job-ready graduates is a significant challenge for the tertiary education sector, particularly in agriculture where traditional views that farming is best learnt on a farm rather than in a classroom sometimes still hold sway. Despite this ingrained perspective, there are several factors that point to the need for a well-educated and university-trained workforce, including the development of technology, the impera-

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tives of the environment and biosecurity, the importance of strong business acumen and the need for a positive sector image. Embracing the technological and data demands of agriculture both now and in the future, some universities have taken the step of developing their own practical farming sites. Two examples of this are UNE’s SMART Farm and the University of Western Australia’s Future Farm 2050 Project. Both of these sites are functioning farms that utilise cutting-edge technology, digital integration and new production techniques in an attempt to improve production processes and sustainability. They are valuable resources for students and researchers at the respective universities, providing a practical and hands-on experience that is unmatched in the country. In order to develop a set of national academic standards for agricultural education at universities, the Australian government recently funded the Agriculture Learning and Teaching Academic Standards (AgLTAS) project. The project involved nationwide consultation with industry, graduates and academics to create a set of standards that represent what an agricultural student should know, understand and be able to execute upon graduation. These specific and thorough standards were released in 2015 to help Australian universities design and deliver programs that attract more students and produce highly-skilled graduates. The AgLTAS standards were expanded to include the Good Practice Guides in 2016, which provide university lecturers, tutors and academics with strategies for teaching and case studies that meet the necessary standards. Yet teaching and education is not the only way in which Australian universities contribute to agriculture – the work done in research is possibly equally as important. One only needs to look at the examples in this chapter from the likes of the Queensland University of Technology, Deakin University and Central Queensland University to get an idea of the cutting-edge contributions made by universities in research. Not only does this research serve an important function for post-graduate education, but it is highly valued by the agricultural industry. Australian universities are at the forefront of the applicable use of farming technologies, genetic advances and sustainable practices. Their distinguished performance in agricultural research is measured by the Excellence in Re-

search for Australia (ERA) rankings, which are administered every few years by the Australian Research Council (ARC). The ERA rankings evaluate the performance of Australian universities across all research disciplines in relation to world standards. The most recent of these rankings were done in 2015, and the results can be seen in the table below. The quality of agricultural research across Australian universities was particularly impressive with 16 universities achieving the highest possible ranking of 5, meaning the research conducted was â&#x20AC;&#x2DC;well above world standardâ&#x20AC;&#x2122;. In further recognition of the high standards of Australian universities, multiple institutions achieved this prestigious ranking in various disciplines of agricultural research. Combining the important educational role played by Australian universities with the research conducted at these institutions, the future of agricul-

tural education in Australia certainly looks very bright. Traditional sceptical views of tertiary education among the farming community are waning as the industry demands graduates who are not only technologically-literate but skilled in areas such as business management and communications. With AgLTAS providing clear guidelines for teaching and universities across the country embracing the opportunities provided by technology and integration with other streams of study, Australian universities have evolved to offer knowledge and skills that go beyond the paddock and produce successful and high-skilled graduates. It is clear that a healthy tertiary education system in Australian agriculture can play a huge role and be beneficial for the continued excellent performance of Australian food and fibre products on the world stage.

TABLE 1 - 2015 ERA RANKINGS OF AUSTRALIAN UNIVERSITIES IN AGRICULTURE RESEARCH DISCIPLINE

ERA 5: WELL ABOVE WORLD STANDARD

ERA 4: ABOVE WORLD STANDARD

ERA 3: WORLD STANDARD

AGRICULTURE AND VETERINARY SCIENCE

La Trobe University Macquarie University Southern Cross University University of New England University of Technology Sydney

Australian National University Central Queensland University Curtin University of Technology Deakin University University of Adelaide University of Melbourne University of Queensland University of Sydney University of Tasmania University of the Sunshine Coast University of Western Australia University of Western Sydney

Charles Darwin University Charles Sturt University Flinders University Griffith University James Cook University Murdoch University University of Southern Queensland

AGRICULTURE, LAND AND FARM MANAGEMENT

University of New England University of Tasmania University of Western Australia

University of Melbourne

ANIMAL PRODUCTION

La Trobe University University of Melbourne University of New England

CROP AND PASTURE PRODUCTION

Australian National University Curtin University of Technology La Trobe University Southern Cross University

HORTICULTURE PRODUCTION

Charles Sturt University University of Adelaide University of Queensland University of Tasmania

AGRICULTURAL BIOTECHNOLOGY

Murdoch University Queensland University of Technology

SOIL SCIENCES

University of Adelaide University of New England University of Sydney University of Western Australia University of Western Sydney

Charles Sturt University Murdoch University University of Adelaide University of Queensland University of Sydney University of Western Australia Murdoch University University of Adelaide University of Queensland University of Southern Queensland, University of Western Australia

Charles Sturt University University of Melbourne University of Sydney University of Tasmania

Griffith University La Trobe University Southern Cross University University of Melbourne University of Queensland

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09/AUSTRALIA’S EDUCATION SECTOR

Agriculture research and innovation at QUT Feeding the world’s rapidly growing population without exhausting the available land and water or degrading the environment is a massive challenge for the agricultural industry, governments and researchers this century.

orldwide food production needs to increase significantly by 2050 to feed the projected population of 9 billion people. Agricultural practice needs to be transformed to become more productive, profitable and sustainable. Queensland University of Technology (QUT), based in Brisbane, utilises its transdisciplinary expertise and infrastructure to conduct cutting-edge research in four key areas of agricultural innovation (described in detail over the following pages): n Biotechnologies for tropical crops, including for bananas, rice, mungbeans and chickpeas n Transformational technologies, including gene regulation platforms and agri-environmental intelligence n Sustainable agriculture techniques, including nitrogen use efficiency and biopesticides n Biorefining technologies, processes and products QUT is a research-intensive Australian university focused on high-impact applied research with end users. QUT works with industry and government partners to identify their business challenges or research problems, and engages transdisciplinary teams with diverse expertise and experience to create innovative solutions. QUT’s researchers work in an environment designed to foster teamwork and innovation, supported by state-of-the art research infrastructure and facilities.

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TRANSDISCIPLINARY RESEARCH INTO GLOBAL PROBLEMS AND SOLUTIONS The grand social, economic and environmental challenges confronting the world do not divide neatly into traditional academic disciplines, so researchers must go beyond conventional ways of thinking and working. Agricultural research and innovation at QUT is driven by the Institute for Future Environments (IFE). The IFE is at the forefront of a shift to transdisciplinary integration and collaboration. It brings together experts from a diverse range of fields – from biotechnology and robotics to environmental monitoring and innovation systems – to work on large-scale research and innovation projects. The IFE’s mission is to generate knowledge, technology and practices that make our world more sustainable, secure and resilient. The IFE partners with industry, government, other research organisations and the community to deploy real-world solutions to the grand challenges humanity faces this century, from feeding the booming global population to managing scarce natural resources and threatened ecosystems. Researchers at the IFE are studying the rapidly evolving and converging environments we live within: n the natural environment – life, land and water n the built environment – infrastructure, buildings and technology n the virtual environment – networks, models and data

Researchers from QUT’s Centre for Tropical Crops and Biocommodities (from left to right): Professor Sagadevan Mundree, Distinguished Professor James Dale, Professor Roger Hellens and Professor Peter Waterhouse

TROPICAL CROPS Biotechnology can enable farmers to grow more food, lose less of what they grow and use less water and fewer chemicals. The Australian state of Queensland is a perfect base for biotechnology studies and trials of the tropical crops that are crucial to feeding the developing nations in the tropics and subtropics. Queensland is blessed with an ideal climate, cutting-edge research facilities, sophisticated agricultural production, political support for emerging bioindustries and a defined regulatory environment. QUT has a strong track record of tropical crops research and innovation, primarily through its Centre for Tropical Crops and Biocommodities (CTCB). Researchers in the CTCB are developing new varieties of tropical crops with

QUT’s expertise n Genetic modification of tropical crops (sugarcane,

bananas, chickpeas, mungbeans, etc.)

n Transgene expression – novel expression technologies

(INPACT), expression of inhibitory or toxic products;

promoter discovery and development

n Biotic and abiotic stress resistance n Gene silencing and crop protection n Crops as biofactories (tobacco and sugarcane) n Protein purification from plants n Biosafety and regulation of GM crops n GM crop field trials

higher yields, greater resistance to drought, diseases and pests, and improved nutritional value and taste. Led by Professor Sagadevan Mundree, the CTCB brings together a unique mix of international expertise in plant biotechnology, process engineering, industrial chemistry and commercialisation. This variety of expertise creates a continuum of research and development from laboratory studies through to products, from gene discovery and genetic manipulation through to field demonstration and pilot plant scale production. The CTCB provides major research and development services for a range of tropical agriculture industries and supports agricultural advancement in developing countries. The CTCB has broad expertise in plant biotechnology, with a particular emphasis on the expression of novel genes in tropical crops. Its research program has three major components: n biofortification of tropical crops to improve human nutrition n development of biotic and abiotic stress-tolerant tropical crops through the deployment of novel resistance genes n characterisation of viruses for the development of diagnostic techniques facilitating distribution of clean planting material The focus is on developing new crop cultivars through genetic modification for nutritional biofortification and plant disease resistance, as well as developing plant disease management technologies. The CTCB’s researchers have extensive experience in tissue culture and transformation, plant molecular biology, plant gene discovery and transgene expression technology, plant virology and plant disease resistance. This expertise has underpinned the development of a number of advanced transgenic plant lines through to field trials, including virus resistance in papaya and biofortification and fungal disease resistance in banana.

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BANANAS Bananas are one of the world’s top ten food crops, with about 122 million tonnes produced worldwide each year. The production of bananas, a tropical and sub-tropical crop, is divided roughly in thirds between Africa, Asia and the Americas. About 15 per cent of banana produce is exported, with a value close to US$13 billion per year. This exported produce primarily goes to developed countries, where the overwhelming demand is for dessert bananas and almost exclusively one type of banana, the Cavendish. In contrast, the banana-producing countries of the wet tropics and sub-tropics grow more than 300 different varieties. And for more than 400 million people, bananas – usually cooked – are a staple food. Bananas are also becoming an increasingly important food security crop. While banana plants require a significant amount of water to produce a bunch, they can withstand very long dry periods. As rainfall becomes increasingly erratic with climate change, this dry period tolerance is becoming extremely important. Virtually all cultivated varieties of bananas are nearly sterile (hence the lack of banana seeds in the fruit). Seedless fruit is preferred by consumers but this sterility has meant that, unlike most other major crops, bananas have not been genetically improved. The vast majority of bananas grown today have not been bred but rather are selections from naturally occurring hybrids, selections that took place probably hundreds to thousands of years ago. However, bananas are in drastic need of improvement. Because of their high level of sterility, it is extremely difficult to improve currently accepted varieties. It is possible to breed bananas using conventional approaches, but the result is different varieties rather than improved versions of the ones already highly regarded by farmers and consumers alike. The alternative is to introduce new traits into current popular varieties using biotechnology. “At QUT, we have been developing genetically modified bananas with enhanced traits for nearly two decades,” says Distinguished Professor James Dale. “We have developed bananas with two different categories of traits: disease resistance and elevated micronutrients (biofortification).” In 2005 QUT, in collaboration with the National Agricultural Research Organisation of Uganda, was funded by the Bill & Melinda Gates Foundation to

develop genetically modified East African Highland bananas with elevated pro-vitamin A and iron levels. The ultimate goal was to alleviate stubbornly high vitamin A deficiency and iron deficiency anaemia in Uganda and surrounding East African countries. Cooking bananas (or matooke) are a staple food in Uganda: average consumption exceeds 500g per person per day. “We have moved a single gene from a banana called Asupina, which is low-yielding but naturally high in pro-vitamin A, into both Cavendish and East African Highland bananas,” says Professor Dale, who has lead this research program at QUT. “Some of the resulting bananas have more than 20 times more pro-vitamin A than the original banana and more than three times our target level. “The project has progressed to field trials in Uganda, from which we will select the elite lines that will be released to Ugandan farmers by 2021. Importantly, the East African Highland bananas will have been generated in Uganda by our Ugandan collaborators for Uganda farmers and their families. We are also transferring the technology to India, the country that produces the most bananas.” Banana production worldwide is increasingly limited by disease, including viral diseases such as bunchy top and fungal diseases such as Fusarium wilt tropical race 4 (TR4). In another project funded by the Bill & Melinda Gates Foundation, QUT researchers have developed Cavendish bananas with resistance to bunchy top. These bananas will be field tested in Malawi starting in 2016. Dessert banana production in Malawi has been devastated by bunchy top and these modified bananas should help resurrect this important cash crop for Malawi’s resource-poor farmers. QUT has also developed and field-trialled Cavendish bananas with resistance to TR4. This fungal disease has the potential to destroy Cavendish production worldwide and is already causing major crop losses on three continents: Australia, Asia and Africa. “QUT’s banana biotechnology program is a world leader,” says Professor Dale. “Our research is supporting the development of Cavendish bananas internationally for commercial production and, importantly, working with partners in developing countries to develop bananas for subsistence famers and their families.”

QUT Distinguished Professor James Dale and Ugandan PhD researcher Stephen Buah with the pro-vitamin A-enriched banana developed at QUT

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QUT plant biotechnology researchers Dr Brett Williams, Professor Sagadevan Mundree and Dr Sudipta Das Bhowmik

PULSES The ballooning world population and erratic climatic conditions are placing unprecedented pressure on global resources and agriculture. Pulse legumes such as chickpeas, lentils and beans are some of the world’s most economical sources of protein for food and feed. Australia has a reputation for producing high-quality pulses. This reputation, in combination with the increasing supply-demand gap, instability in global pulse production areas and current premium market prices for pulses, mean there is great potential for increased export of Australian pulses. A QUT research team led by Professor Sagadevan Mundree is developing chickpea plants that promise to be more drought-tolerant, nutritious and resistant to certain fungal diseases. Tropical Pulses for Queensland is a three-year collaborative, industry-directed project that aims to increase the production of tropical pulses such as chickpeas and mungbeans in Queensland and throughout Australia. QUT’s research partners on the project include the Queensland Department of Agriculture and Fisheries and Plant Solutions Australia. Using genes from a native resurrection grass that tolerates severe drought, salinity and high temperatures, the QUT research team has generated genetically elite chickpea lines that are resistant against Botrytis (grey mould), the fungal disease that devastated the Australian chickpea industry in 2010. Although preliminary, the results have been promising: the chickpea lines are demonstrating improved resistance against Botrytis as well as improved tolerance of water deficits. In addition to drought and fungal resistance, the research team has been tackling the global issue of iron deficiency. They have been developing chickpea varieties with increased iron content and have been using QUT’s Central Ana-

lytical Research Facility to measure the micronutrient profile in chickpea seeds. In partnership with Plant Solutions Australia, Professor Mundree and the team have applied a new pre-treatment, based on an organic chemical, to mungbean seeds and conducted field trials in QUT’s labs and greenhouses and at the Department of Agriculture and Fisheries’ (DAF) Hermitage Research Station near Warwick in southeast Queensland. Professor Mundree says mungbean producers could be growing drought-tolerant mungbeans with deeper and more robust root systems within three years. “We can say without doubt that we have developed stronger, deeper and more branched root systems in treated mungbean plants. In the field these plants produced far more seeds per gram of biomass, with the harvest index increasing by 20 per cent. This increase was achieved despite the absence of significant moisture stress. We started field trials under a rainout shelter near Kingaroy in mid-December 2015 to demonstrate what this treatment can deliver for plants when a drought stress is imposed.” Two areas of the project involving mungbean research were conducted in partnership with DAF and will benefit mungbean growers and breeders for years to come. A jointly-developed Nested Association Mapping population has been used to genetically map a diverse range of mungbean lines, including current varieties used in cropping. Like all crops, mungbean and chickpea are susceptible to poor environmental and soil conditions. In collaboration with DAF scientists, the QUT team has developed a modelling tool to identify the patterns between genetics, environment and management issues that affect chickpea and mungbean plants. Once developed, these tools will enable farmers to implement precision agriculture to better understand and mitigate risks and deliver more high-quality pulses to the international market.

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Farming robot Agbot II and project team members

Transformational Technologies AGRI-ENVIRONMENTAL INTELLIGENCE Food security poses a significant risk to our global society. Small shocks in the production of key food commodities can not only destabilise agricultural industries and markets; they can also lead to global political unrest, population displacement, terrorist attacks and financial volatility. Since the 1960s, agriculture productivity has risen dramatically as a result of increased use of agrochemicals and significant advances in management practices, crop and animal genetics and agricultural mechanisation. But the agricultural system is now pushing against the boundaries of our natural resources and environments. We urgently need to expand the scope of food production management to include sustainability. What is the next agricultural revolution? Managing the complexity of food production systems and their interactions with the natural, social and economic environments requires a delicate blend of technology and a whole-of-system view. According to Professor Tristan Perez, leader of the IntelliSensing Enabling Platform at QUT’s Institute for Future Environments (IFE), “the next wave of innovation in agriculture will be triggered by the integration of emerging technologies related to data analytics, robotics and autonomous systems, sensors, computer-human interaction and economic modelling with a wholeof-system view of the farming enterprise and the agri-food value chain.” QUT is developing tools and techniques, collectively known as agri-environmental intelligence, which will help farmers and farming enterprises to use agronomic, environmental and economic data to run their operations more profitably and sustainably. Agri-environmental intelligence will enable farmers to optimise the use of labour, energy, water and chemicals and to account for variability and uncertainty across the production system and along the whole value chain. “We are working with industry and government to help transition agriculture into the digital age,” says IFE’s Executive Director Professor Bronwyn Harch. “Leaders who can integrate deep agricultural knowledge with cutting-edge research in technology, data and systems science will be central to

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the next agricultural revolution.” QUT’s transdisciplinary digital agriculture research focuses on the following areas: n discovery from data n use of sensors for informed decision making n designing infrastructure for effective management of complex systems n demolishing barriers for technology adoption One example of the new farming technology being developed by QUT is AgBot II (pictured above). AgBot II is part of a new generation of crop and weed management machines and is optimised to work in autonomous groups in both broadacre and horticultural applications. AgBot II’s software, cameras, sensors and other equipment enable it to navigate autonomously, apply fertiliser, and detect, classify and kill weeds. QUT is seeking to work with research partners on major agricultural innovation projects. “We encourage industry and government to join our transdisciplinary efforts at the Institute for Future Environments to develop more resilient, safe and sustainable food production systems through the application of novel robotic and autonomous systems technologies, data analytics and visualisation and systems science,” says Professor Harch.

QUT’s expertise n Robots and autonomous systems for crop

management and environmental monitoring

n Agri-environmental informatics n Big data analysis and modelling n Mathematical sciences n Data to decisions and support systems n Computer–human interaction n Mobile app development n 3D data visualisation

GENE REGULATION PLATFORMS The genes of a crop plant determine its growth, development, survival and agronomic fitness. Classical plant breeding and cutting-edge molecular genetics have both played a part in the genetic improvement of our current crops. They have produced higher yielding, better tasting, more resilient crops. The world’s food security relies on these modern crops and they require continual genetic enhancement to produce even higher yields and better protection against pests, diseases and changing environmental stresses. As the world’s population grows, new crop diseases emerge and climate change creates harsher conditions. Thus, continued improvement of sustainable crops becomes ever more critical. “An increasingly important method of crop enhancement is gene regulation – that is, changing the way that genes function,” says QUT Professor of Molecular Genetics Peter Waterhouse. “In some situations, the over-expression or translocation of particular genes can produce desirable agronomic traits. In other circumstances, reducing or completely silencing the expression of specific genes is beneficial. The same is true for bio-factory crops generating products such as vaccines, therapeutics and modified oils.” Researchers at QUT’s Centre for Tropical Crops and Biocommodities (CTCB) have made major contributions to the science and technology of gene regulation, both for over-expressing and for silencing genes. QUT’s INPACT (in plant activation) technology tells a growing plant to switch, at the right time, from producing low levels of a desired product to spending most of its energy and resources in synthesising the product (such as a compound needed for medical purposes). QUT is also a leader in the development of gene silencing technology, which could facilitate the manufacture of new oils for biofuels, healthier foods and better pharmaceutical products. Silencing the genes that control certain

enzymatic steps of a network pathway can redirect a plant to produce the desired compound at high levels with minimal by-products – such as encouraging high levels of Omega-3 fatty acids rather than saturated fats, or more codeine and morphine than sanguinine. This technology, known as RNA interference (RNAi), was developed by a team led by Professor Waterhouse and is now used around the world for silencing genes. The possible uses of INPACT and RNAi in both agricultural and biopharmaceutical production are huge and varied. One new direction in research is using trans-kingdom RNAi to protect crops from pests. Developed and patented by a QUT team, this technique directs a plant’s RNAi pathway to silence genes in the pest that is feeding on it. In future it could be used to control major pests such as the cotton bollworm. “The ability to precisely edit genes in the genomes of crop plants without the hallmarks of genetic engineering is tantalisingly close, but there are hurdles to overcome,” says Professor Waterhouse. “We need to understand how a plant distinguishes its own genes from those delivered through genetic insertion and develop ways to enhance, repair, update and redirect genetic traits in total harmony with the genome. These are the challenges that the CTCB is taking on, and will pave the way to safer, higher yielding and more sustainable crops for the future.”

QUT’s expertise n Gene expression and silencing n RNA interference n Trans-kingdom gene regulations

QUT molecular geneticists Dr Julia Bally and Professor Peter Waterhouse

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Sustainable Agriculture

To feed our growing population, the world must produce as much food in the next 40 years as we have produced in all of human history. Climate variability and change, low fertility soils and pests and diseases all threaten the longterm productivity of our agricultural systems. “We need to replenish the valuable nutrients in our soils and use water and fertiliser more efficiently on our crops and pastures,” says Professor Peter Grace, theme leader of Managing for Resilient Landscapes in QUT’s Institute for Future Environments. “As costs of fertilisers, fuel and pesticides rise, we need to change the way we view inputs.” QUT excels in research and development of resilient farming systems to support the sustainable intensification and ongoing profitability of the grains, cotton, dairy, cane and livestock industries. USING NITROGEN MORE EFFICIENTLY Inefficient use of nitrogen fertilisers is a major barrier to improving Australia’s agricultural productivity and profitability, as well as a major source of environmental pollution. “Of the 1 million tonnes of nitrogen fertilisers applied annually to Australian crops and pastures, half is lost to the environment,” notes Professor Grace. “The lost nitrogen includes nitrous oxide (N2O), a potent greenhouse gas, and nitrate (NO3-), a major water-borne pollutant that contributes to eutrophication of rivers and lakes.” QUT leads Australia’s research to improve nitrogen use efficiency. It coordinated Australia’s largest nitrogen-use efficiency program (www.n2o.net. au) and has long-term research relationships throughout South Asia, South

Professor Peter Grace and the greenhouse gas monitoring stations developed at QUT

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America and the USA with the prestigious Earth Institute. QUT’s approach uses advanced simulation and statistical modelling to improve soil fertility, soil health and crop and pasture production. QUT researchers have developed: n automated greenhouse gas monitoring stations (including stable isotopes) that measure emissions from farms of N2O, carbon dioxide (CO2) and methane (CH4) n improved modelling tools to allow farmers to manage fertiliser use and predict nitrogen requirements of crops n new fertiliser management strategies for the effective use of enhanced- efficiency fertilisers and organic soil amendments, such as manures n de-nitrification bioreactors that help reduce nitrate pollution of our waterways QUT’s internationally recognised approach improves soil organic matter content and fertility, reduces greenhouse gas emissions and improves nitrogen and water use efficiency. MEASURING AND MINIMISING ENVIRONMENTAL IMPACTS As global farming systems intensify and, where possible, expand in response to growing demand, we need to better understand and monitor the impacts of food production on landscapes to ensure their sustainability. The pressures that agriculture puts on the environment – through resource depletion and emissions to air, land and water – can be quantified using tools such as life-cycle assessment (LCA). These tools assess resource use and contamination of the environment by quantifying impacts such as water, nutrient and land use, fossil energy demand, greenhouse gas emissions and eutrophication. When expressed per unit of product (e.g. per kilogram of wheat or beef), they also provide a measure of production efficiency. LCA is useful for identifying hot-spots of environmental impact to target remedial actions and for demonstrating improvements over time. However, LCA is very data-hungry – its application is often limited by lack of good data and the consequent use of assumptions. QUT’s measurement and analysis systems, together with expertise in database management and storage protocols, give QUT a unique ability to collect and manage large amounts of high-quality data for quantifying resource use and greenhouse gas emissions. Combined with QUT’s broader environmental data acquisition capabilities – such as remote sensing, vegetation modelling and biodiversity monitoring using innovative acoustic techniques – this provides an integrated platform for understanding the environmental sustainability of agro-ecosystems. “Collaboration across disciplines within QUT enables the environmental, economic and social pillars of sustainability to be linked, including through the use of Bayesian networks,” says Professor Grace. “This

QUT researchers Associate Professor Robert Speight and Associate Professor Caroline Hauxwell, who are investigating the properties and ecology of microorganisms associated with insects

integrated information is helping farmers and producers to understand and improve their environmental performance and, at the same time, increase production efficiency and profitability. This capacity will become even more important in the future, and QUT is well-placed to respond to this growing need in Australia.” Through technical cooperation with global organisations such as the Food and Agriculture Organisation of the United Nations (FAO), QUT is contributing to worldwide efforts to address major global challenges such as food security and climate change. FIGHTING CROP PESTS AND DISEASES WITH MICROBES Pests and diseases ruin significant amounts of crops and stored food, but managing them with chemical insecticides is becoming more difficult. Pests have become resistant to insecticides, and chemicals are being withdrawn from use as concerns grow over their effects on human health and the environment. New approaches to managing pests and diseases rely on an unexpected ally: microorganisms. Australia established itself as a world leader in the manufacture and use of biopesticides (pesticides derived from microorganisms) when the Helicoverpa armigera moth’s resistance to chemical insecticides threatened the cotton, grain and horticulture industries. Biopesticides based on the moth larvae’s natural pathogens were found not only to control the pests, but also to have no impact on people or on beneficial invertebrates like ladybeetles and spiders. QUT researchers have worked with AgBiTech to manufacture these biopesticides. AgBiTech has grown from a local startup into an international producer and distributor registered in the USA, Brazil and South Africa. “Scientists have known for centuries that microorganisms play an essen-

tial part in the interactions between crops, soils and pests, but in the last five years interest in the use of microorganisms as bioinoculants and biopesticides has risen dramatically,” notes QUT Associate Professor Caroline Hauxwell. “Researchers are studying plant and pest ‘microbiomes’ – the symbiotic communities of bacteria and fungi that live on and inside larger organisms. “Key bacteria and fungi are sought out and produced as registered products to protect crops against pathogens and increase the uptake of nutrients like phosphate. In plants, these microorganisms form complex communities on the roots, connecting the plants to each other and to their environment.” Australia has a unique and ancient environment rich in microorganisms, and QUT researchers are working with industry leaders to identify useful microorganisms and understand the complex interactions that make them effective allies in the future of sustainable farming. QUT’s research uses advanced molecular techniques to study the interactions between insects, plants and microorganisms, and reveals how microbial communities respond to changes in the environment in ways that can protect and support crops.

QUT’s expertise n Soil and water science and management n Nitrogen-use efficiency n Carbon management n Greenhouse gas emissions monitoring n Pest and weed modelling and management n Microbial inoculant and insecticide development n Landscape ecology n Agricultural and resource economics n Environmental law and humanities

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Associate Professor Ian O’Hara outside QUT’s Mackay Renewable Biocommodities Pilot Plant, based on the site of an operating sugar mill.

Biorefining—turning waste into products, revenue and jobs

Agriculture and agribusinesses are important parts of Australia’s economy, with the value of agricultural production approaching $50 billion per year. In 2014, Deloitte Australia nominated agribusiness as one of five industry sectors with the potential to take over from mining as key drivers of growth in the Australian economy. The burgeoning opportunity for agribusiness is largely the result of population and income growth in Asia: “Of all the sectors in the Australian economy, agribusiness was the sector with the strongest competitive advantages for Australia’s economic outlook. The key attributes of agribusiness in Australia contributing to this competitive advantage include our abundance of agricultural land and our proximity to emerging Asian markets.” (Deloitte Touche Tohmatsu (2014), ‘Positioning for prosperity? Catching the next wave’) NEW BIOPRODUCTS AND TECHNOLOGIES Australian agribusinesses, however, rely heavily on primary commodity products (such as sugar, cotton, grains and animal and forestry products) for revenue. “One of the key pathways to a profitable future for Australian agriculture is to make higher value bioproducts from agricultural primary products, off-specification primary products and low-value or waste by-products,” says QUT Associate Professor Ian O’Hara, theme leader for Bioenergy within QUT’s Centre for Tropical Crops and Biocommodities (CTCB). “Bioproducts create new revenue streams, which increases industry sustainability and profitability.” Advances in industrial biotechnology and biomanufacturing – including synthetic biology, microbial engineering, green chemistry and bioprocess engineering – have led to new crop and livestock production and conversion

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technologies. Using new microbial treatments in crop and livestock production systems could transform agricultural productivity as well as plant and animal health. These technologies and the emerging global bioeconomy are creating new markets for agricultural producers and boosting the viability of existing crop products and supply chains. NEW OPPORTUNITIES THROUGH BIOREFINING Biorefining is the conversion of biomass from agricultural and forestry industries into bioproducts such as chemicals, plastics, fuels, animal feeds, nutraceuticals and pharmaceuticals. Much of the early development in biorefining related to ethanol fuel, particularly in Brazil and the USA, where the ethanol industry expanded very rapidly on the back of strong government policies. This development resulted in large reductions in capital and operating costs, significant technology improvements and a global market for industrial biotechnology products. But ethanol production is just one of many applications of biorefining. Tremendous advances have been made in the commercialisation of a wide range of bioproducts including renewable packaging, chemicals, bioplastics and advanced biofuels. The global fuels and chemicals industry is worth US$5 trillion and is expected to grow at three per cent per year to 2050. Bioproduct markets are projected to grow to US$1.4 trillion by 2025 at an annual growth rate of 16 per cent. The biochemicals market is forecast to grow to US$570 billion by 2025 – a doubling of market demand within a decade. Bio-based polymer production is expected to triple between 2013 and 2020 at an annual growth rate of 20 per cent. ECONOMIC BENEFITS OF BIOREFINING Australia’s agricultural industries are uniquely placed to provide biorefinery feedstocks, and hence be a profitable supplier of bioproducts into Asia.

QUT recently commissioned a study by Deloitte Access Economics and Corelli Consulting that highlights the economic potential of a tropical biorefinery industry in Australia (www.qut.edu.au/ife/biorefinery). The study investigated the potential conversion of sugarcane, forestry residues, sorghum, green wastes and other feedstocks into a range of bioproducts including biopolymers, resins, organic acids, nutritional products and advanced fuels. The study projected a net present value contribution from biorefineries in Queensland alone of around $21.5 billion over the next 20 years and the creation of 6640 new full-time jobs, mostly in regional areas. The potential benefits of this industry for Australia more broadly would be much greater. The study recommended investment in the next phase of research and development, engineering scale-up and business opportunity assessment. BIOREFINING RESEARCH AT QUT QUT is a pioneer in biorefining research and innovation in Australia. Through its Institute for Future Environments and Centre for Tropical Crops and Biocommodities, QUT has developed the expertise and infrastructure for research and demonstration of the production of bioproducts from agricultural biomass. This expertise covers a wide spectrum of areas including synthetic biology, microbial biotechnology and fermentation, enzyme engineering, organic and carbohydrate chemistry, process engineering, techno-economic assessment, system analysis and value chain assessment. “QUT’s approach is to build transdisciplinary teams that work across the project cycle, from discovery through laboratory testing and pilot-scale development to commercial application,” says Associate Professor O’Hara. “QUT researchers lead large and complex projects as part of both national and international research collaborations that have delivered and continue to deliver significant outcomes for industry. Key partners include Research Development Corporations, agribusinesses, grower groups, other universities and researchers, industry groups and Australian and international companies.”

QUT designed, built and now operates Australia’s only publicly accessible biorefinery pilot plant. The $10 million Mackay Renewable Biocommodities Pilot Plant was funded by the Australian government, the Queensland government and QUT. In operation on the site of Mackay Sugar Ltd’s Racecourse Mill in Mackay, Queensland since 2010, the pilot plant is a unique facility in which to develop and demonstrate biorefinery technologies in Australia at scale. FUTURE DIRECTIONS IN BIOREFINING RESEARCH AND DEPLOYMENT QUT is seeking to develop high-impact biorefining technologies and to support the industry’s establishment and growth in Australia. Increased collaboration between industry, government and research organisations is required to build an environment in which these new technologies can be successfully deployed at scale. The benefits will be new income streams for farmers and manufacturers, new jobs in regional areas and a more profitable and sustainable agricultural sector.

QUT’s expertise n Biorefinery research, innovation and testing n Biomass processing, including sugarcane n Biofuels and bioproducts generation, including

bioethanol, biodiesel and plastics

n Industrial chemistry and biotechnology n Process engineering, design and control n Agricultural and resource economics

Pilot Plant Manager Dr Heng-Ho Wong inside QUT’s Mackay Renewable Biocommodities Pilot Plant

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Experiential learning gives students a taste of modern ag Located in Sydney’s Bellevue Hill, The Scots College has had a close relationship with the Australian agricultural community for well over a century. Not only does Scots take a significant number of boarding students from country regions, but agriculture has been an important part of the college’s educational experience for a long time. This has only been reinforced by the practical learning experiences on offer at the new Bannockburn campus.

he Scots College was founded in 1893, when its first Principal – Reverend Arthur Aspinall – saw a need to educate boys from isolated farming families in the Central West of NSW. While it has since expanded its cohort to include students from Sydney and all over the world, Scots has retained country boarders to this day – in fact, boarding students make up roughly 250 of the school’s 1200 high school students.

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Agriculture as an educational discipline was dropped for a period of time at Scots, though under the guidance of Principal Dr Ian Lambert it has made a comeback to the curriculum in the last few years. This is not only because of the importance of remaining true to the origins and heritage of the school, but also because teaching about agriculture allows boys to get back to nature and recognise the significance of issues such as food security and animal welfare. In addition, the modern agricultural industry now offers a broad scope of roles and interest for prospective employees – agriculture is not just limited to ploughing a field or herding livestock, it incorporates science, technology, business, marketing and myriad other industries. As such, preparing boys for a successful career in the agricultural industry requires a different type of learning, one that enables students to understand and get excited about the use of drones and robotics, genetic testing and the analysis of water and soil. “Modern society’s ideas about food have changed – being interested in agriculture is not just about wanting

to be a farmer,” says Dr Lambert. “Here in Australia, we have to redefine how we’re going to be a food producer in the future and think about the sustainability of our regional cities and how we’re going to attract people into these industries. “Environmental degradation and food security are the biggest threats facing the world, and when you think along those terms in education, there’s a lot of problem solving that students really enjoy doing. Many of the students at Scot’s will be involved in trying to solve such problems with technology and science in the future, so we need to be preparing them for this reality in order to position Australia as a major provider of food and other resources.” Key to the college’s innovative teaching in agriculture and related sectors is the Bannockburn campus – 300 hectares of pristine natural environment and farming land in the Shoalhaven area of NSW. In an isolated area of considerable natural beauty, Bannockburn provides students a chance to connect with the land. Located in a historic beef cattle and cropping area, the property was gifted to Scots in 2008 and opened to students in 2016, offering Scots boys the chance to experience nature and learn about agriculture, food and fibre provenance, environmental sustainability and much more. Far from being limited to a traditional agricultural program, the campus is enjoyed by boys studying a range of subjects including geography, science, mathematics, cadets, technology, history and languages. Indeed, the eco-buildings planned for short term accommodation at the campus had design input from a Year 10 technology class. “Here at Bannockburn we have incredible experiential learning opportunities. With semi-native bush, a rocky ridge, river flats and mangroves the Bannockburn landscape can be used to achieve a multitude of outcomes across the curriculum,” says Kym McMaster, Coordinator of Experiential Education at Bannockburn. “I’ve been involved in education my whole life and I’ve not come across a school that can offer these experiential activities and connections on such a large scale. Bannockburn allows an opportunity for boys to spark an interest in the food production cycle and become passionate about being good stewards of the environment.” Dr Lambert’s vision for Bannockburn is to have a campus that promotes sustainability and good stewardship of the land. The experience for the boys at the campus is geared towards minimising their environmental footprint. Plastic bottles are not permitted on site, rubbish is sorted and recycled and all food is sourced locally. Future planning includes building accommodation with biodegradable toilets, recycled water and solar power. All food waste from the Bannockburn, Glengarry and Bellevue Hill campuses will be recycled in the farming system. Technology also plays a big role in the educational experience at Bannockburn. Genetic testing, cross-breeding and the use of drones are all trialled to give students an idea of how to improve animal or crop returns through the use of science and technology. Digital connectivity provides live data on climate, rainfall, windspeed and soil temperature, which students are able to access from anywhere via a phone app that allows the boys and the wider Scots community to feel more connected and involved with the activities on the land.

And these experiences are not just for the country boarders – Bannockburn enables city kids the chance to sample rural life as well. For these kids, it opens their eyes to life outside the city bubble and a potential future career they may not have considered before. “In some ways there’s a real deficit for a lot of city kids these days – a lot of boys have never really seen a chicken lay an egg, or seen a cow give birth or a calf feeding,” says Dr Lambert. “I think camping overnight in a rural area and being surrounded by a natural pristine environment is really quite eye-opening for them.” It is this sort of practical, hands-on teaching that is informing the curriculum at Scots and offers a novel way to capture the minds of young students. It works hand-in-hand with the lessons taught in the classroom, as the boys can see the theory of what they are learning put into practice at Bannockburn. “Education is really about engaging in the real experience, reflecting on the relationship of that experience to theory and the reason behind these practices,” says Dr Lambert. “Students can monitor how the theory they learnt in a classroom unfolds in a practical setting, providing a cycle of reflection that moves from theory to practice.”

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Australia’s regional and rural future Deakin University’s Centre for Regional and Rural Futures (CeRRF) is Australia’s only research institution devoted to a multidisciplinary approach to the key issues confronting non-metropolitan Australia. G R AE M E P H ILIPSON finds out how it works.

he term ‘regional and rural Australia’ (sometimes referred to as ‘RARA’) is increasingly being used to describe that part of the country outside of the big cities. Australia is one of the most urbanised countries on Earth. Out of a population of 24 million, 15 million live in the five mainland state capitals, and another 2.5 million live in other major cities. That leaves about 6.5 million people in regional and rural Australia – about the same number of people as Melbourne and Perth combined, and more people than live in New Zealand or Singapore. It is a significant number. Many believe that this group, more than a quarter of Australia’s population, do not have the same level of services or quality of life as people in the cities. These concerns led directly to the formation in 2013 of the Centre for Regional and Rural Futures (CeRRF) at Deakin University. CeRRF (pronounced ‘surf’) has been established to address regional and rural productivity and innovation across multiple fields. With expertise in engineering, science, business, economics and the humanities, CeRRF’s focus is on bridging the gaps between regional enterprises, governments and academia. Its activities are based around five core themes, all of which are major challenges facing humanity in the 21st century and beyond: n Regional competitiveness n Better products and services n Enabling technologies

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n Sustainable environment n Water use.

Drawing on expertise within Australia and internationally, CeRRF leads Deakin University’s interactions with rural and regional industries and communities. By acting as a focal point for interaction, CeRRF facilitates new research, training and teaching activities across Deakin’s faculties, institutes and research centres. CeRRF’s programs are interlocking and supported by existing staff across Deakin’s wide ranging research activities. In addition to this core group of staff, CeRRF has also engaged a broad range of external partners in Australia and internationally. CeRRF attracts students and academics from engineering, science, finance, planning and humanities, offering a broad range of integrated learning programs and capacity-building opportunities. WHY CERRF WAS FOUNDED Deakin University was established in 1974 as Victoria’s first regional university. Its primary campus is in Geelong, a city of 185,000 people 75 km southwest of Melbourne. It is now Australia’s eighth largest university, and one of only three in Victoria placed in the top three per cent of world universities by all three of the major ranking systems. Deakin is committed to the development of regional and rural industries and communities. This commitment has been reaffirmed through the es-

Drone with agricultural multi-spectral imaging camera near a cotton crop in Whitton, NSW

tablishment of CeRRF, which has a mission to be a major contributor to the wealth and well-being of regional and rural Australia. CeRRF does this by providing innovative technologies and strategies that allow regional and rural industries and communities to sustainably enhance agricultural productivity and regional competitiveness. This helps Australia improve regional productivity and capitalise on opportunities to meet the demand for diverse, high-quality diets from the rapidly expanding middle class of Asia. CeRRF’s Director, Dr David Halliwell, explains: “CeRRF is unique in that it is customer-driven, outcome-focused and concentrates on the specific problems that industries, government and communities have identified as requiring solutions. We deploy interdisciplinary teams of researchers to address these real-world problems.” Dr Halliwell says CeRRF’s role is to be a public voice regarding research needs and development. “We proactively inform governments and policymakers of new approaches, underpinned by data, to drive regional productivity. We are fortunate to be able to examine issues from many perspectives and to be able to access the breadth of expertise needed to challenge sometimes-complex issues. We want to be proactive about influencing what we believe is good policy by demonstrating that it is in fact good policy. “We have deliberately designed our research themes broadly to maximise future opportunities and not constrain our thinking. We feel that Deakin has a particular responsibility for the needs of regional Australia, and that the lessons we learn can be shared by other regions and other countries.” Dr Halliwell says that many Australian universities have researchers working on agricultural productivity and regional competitiveness. “But the research agenda is often set by academics rather than end users, with outcomes that are more theoretical than practical. This means the product of the research is often narrow in application and not readily scalable. “CeRRF’s approach differs in ways that make it unique in Australia. We deploy interdisciplinary teams of researchers, from engineers and scientists to business analysts and regional planners, to provide practical solutions that have immediate practical application and a clear path to market.”

WATER, WATER EVERYWHERE Water management is of particular interest to CeRRF. Dr Halliwell is a former CEO of Water Research Australia, and CeRRF has assumed responsibility for the CSIRO’s former water and irrigation research centre at Griffith, in the Riverina district of southern NSW. That facility has become a major research centre on water usage and optimisation with engineers, agronomists and environmental scientists working with rice, grape and nut producers to improve irrigated agriculture productivity. “The group in Griffith is doing research around water use efficiency in irrigated agriculture,” explains Dr Halliwell. “They have significant funding through the Rural Research and Development Corporations, particularly around rice and cotton, as well as support from the Commonwealth government. They have a core objective to drive water use efficiency per production unit in irrigated agriculture, and do so through the use of a variety of smart on-farm technologies. “As competition between water used for urban needs versus agriculture increases, the greater efficiency of water used in agriculture helps alleviate this issue. We are also trending towards a much stronger level of understanding between the water used for irrigation and urban needs.” Other projects CeRRF is working on include: B n eneficial microbes: A project funded by the Grains Research and Development Corporation in which seeds are coated with beneficial

Developing Regional Competiveness Fundamental to the success of CeRRF is a deep understanding of the key economic, policy and social drivers for regional and rural industries and communities. A unique characteristic of CeRRF is the development of this theme and the interactions it has with the four other research themes (Better Products and Services, Enabling Technologies, Sustainable Environment and Water Use). This understanding requires interaction between science, technological development, economics, policy and education. For example, CeRRF provides cross-faculty development of education programs targeting the food value chain, linking agribusiness with the international demand for clean, green food of quality. CeRRF works with industry, government and communities to identify areas for technological and economic development that will directly impact on regional development. Linking these themes with an express need to build human and regional capital provides a clear mandate for CeRRF to engage with rural and regional industries and communities to tackle the many difficult problems complicating regional development. These include the growing skills shortage, the need for innovation and entrepreneurship and the ageing regional industry population as many workers and youth migrate to urban areas. Economic policy development in areas such as soil and water, improved regional communications and the relationship between food demand and supply informs the needs of food and food security, sustainable industrial biotechnology and smart agriculture, and provides a realworld context for CeRRF’s open innovation programs.

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Better Products and Services The development of value-added agricultural products and services has the potential to drive efficiency and increase profitability in regional and rural communities. CeRRF leverages its strong technology focus in IT, sensors, chemistry, biology and engineering to extend these benefits to farmers and producers. In Australia, the profitability of future agricultural production systems will be driven by our ability to focus on high-value products, including value-added products, with the commensurate level of quality and purity that Australian producers are already known for. One component of these value-added products is Australia’s ability to support the development of industrial bio-based value chains. While these value chains may have initially competed with food production (using corn or grain

microbes, in this case nitrogen-fixing bacteria, to enhance plant growth and ultimately yield. Such approaches drive efficiency in farming practice, which ultimately increase profitability. n Chicken influenza: Uses ‘lab-on-a-chip’ technology to detect avian in fluenza from samples of chicken saliva. Formerly in suspected cases of chicken influenza a whole shed – sometimes containing tens of thousands of birds – would have to be destroyed. This new technology provides the ability to rapidly and accurately diagnose the issue in real time. The chip connects to a mobile phone, which becomes the detection device. n Land use mapping: Looks at the impact of climate change on agricultural industries by examining the suitability of land for various purposes and projecting it forward in time using different climate scenarios. The system uses spatial data and geographic information system (GIS) mapping to overlay things like soil type, cropping systems and weather data to forecast the suitability of lands for different applications in the future.

production for biofuels, for instance), many countries are now moving towards the utilisation of non-food biomass sources. An opportunity exists in Australia to do the same in niches and commodities applicable to Australia. Adding significant value to current farming and forestry operations by extracting and isolating valuable by-products will enhance farm productivity and profitability without compromise. Using existing Australian resources for industrial biotechnology has the potential to significantly impact four key sectors of the economy: agriculture, forestry, food processing and the chemicals and plastics industry. The chemical and plastics sector in Australia has an annual turnover of approximately $32 billion and directly employs 85,000 people. The added value from the sector amounts to almost $10 billion each year. The forestry sector employs an equivalent number of people in its value chain and contributes approximately one per cent of Australia’s GDP – $19 billion annually. The food processing sector, with a turnover of $71 billion and an annual value add in excess of $20 billion in 2011, uses many chemical additives during the production process. Geelong itself has a significant chemical industry based around petrochemical company Shell, with a growing foodprocessing sector and a link to the forestry sector through the Geelong Port. Deakin plays a major role in working with these industries while the transition to higher value manufacturing is underway. Renewable chemicals from biomasses (forest and crop residues and food waste streams) provide the basis for building a strong new industry in the region. Potential products are quite diverse, and include poly-phenolic compounds (flavonoids) and synthesised poly-acrylonitrile (PAN, the dominant precursor for carbon fibre). Coinvestment by industry and government will help develop pilot scale facilities.

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Sustainable Environment Climate change will impact on the land available for production, and increasingly large variations in temperature and rainfall will impact production from even arable areas. The demand for food from Asia will over time cause a significant increase in food prices, and will necessitate increases in production per hectare within Australia. This will impact the entire value chain, and without early modelling and planning could be extremely disruptive to Australia’s food industry. Areas of interest to Deakin behind the farm gate and where capability exists are:

n Water – monitoring, materials, engineering,

economics and policy

n Energy – storage, distribution and production n Biosecurity – monitoring and evaluation of threats

to production

n Ecosystem services – landscape management, ecosystem

sciences, evaluation and monitoring

n Pest and plant disease management n Soil modification, micro-nutrient adjustment

and monitoring.

Beyond the farm gate, Deakin has the capability to provide food security through quality improvement. Australian farm production is very efficient by international standards, but it also has a very high input cost compared to that of many countries. CeRRF has a group with expertise in climate modelling, which provides interactive mapping across our regional and rural communities and indicates the potential impacts of climate change as well as the future land use suitability for different farming systems. This modelling capability provides the baseline information that underpins the broader work on these systems.

EXPANDING THE SCOPE Deakin began its life as a regional university, but its biggest campus is now in the Melbourne suburb of Burwood. As well as its original home on the Geelong waterfront, it also has a campus at Waurn Ponds, on the western edge of the city, which is home to the burgeoning Geelong Technology Precinct. There is a fourth campus in the western Victorian regional city of Warrnambool. “In some respects we’re no longer a regional university,” says Dr Halliwell, “but we want to stay faithful to our heritage. We wanted to find ways to use our expertise to help regional and rural Australia, by tapping into our regional focus and the technological expertise we have here at Deakin. That is why we started CeRRF. “Deakin really is a university that sees itself as doing research that makes a difference. We’re increasingly looking at the problems communities face right now, and at practical solutions to those problems. We have staff with the expertise to address some of those immediate issues. CeRRF is a portal into the University, an interface between academia and the community, industry and all levels of government. “We have been careful not to limit our activities by geography,” explains

Enabling Technologies Building smart agriculture industries requires the digital infrastructure to efficiently and effectively connect data, computing power and people with the goal of creating derivative solutions and knowledge for agricultural systems.

Dr Halliwell. “We are local, national and international.” CeRRF engages in focused collaborations with selected partners in regions of India, China, Indonesia and Latin America that face similar resource challenges to those encountered in south-eastern Australia. These challenges are often related to climate, water, soils, human capital and supply chains. “This allows CeRRF to do three things,” says Dr Halliwell. “We can access international expertise, conduct relevant trials at a scale and cost difficult to match in Australia and simultaneously develop supply and value chain insights in markets relevant to Australian producers. “We have a number of Memoranda of Understanding with Latin American countries, and there is also a very strong connection with TERI (The Energy and Resources Institute) in India. TERI is a major research centre that was originally focused on energy; it’s much broader now. “We have leveraged our close relationship with TERI to initiate research engagements around agricultural biotechnology. We are funding quite a number of Deakin PhD students who are based in India, and Deakin has also financially supported the expansion of the Nanobiotechnology Centre at TERI. “We try to identify countries that share similar problems that Australia has, and look for opportunities to collaborate. Many places in South America, China and India have the same sorts of water management and agricultural issues that we have in Australia.” CeRRF is now moving beyond its start-up phase. With significant investment put into cutting-edge facilities fitted with state-of-the-art equipment, CeRRF has quickly become the premier centre for regional research in Australia, producing innovations that are having a positive impact on non-metropolitan communities in Australia and globally.

The integration of Deakin’s expertise in ICT, engineering and science (fields that include microfluidics and robotics) across a range of technology platforms with CeRRF’s capabilities serves this function exceptionally well. Sensor technology enabled by the “Internet of Things” is increasingly being used to realise greater efficiency and product diversity and quality throughout the whole food manufacturing value chain. This ranges from the development of an autonomous GPS-controlled lab-ona-tractor technology, to remote animal monitoring and treatment stations, through to food process monitoring and smart packaging. To develop these smart sensor technologies, an integrated multidisciplinary approach is necessary. CeRRF has developed a number of technology platforms for the clinical diagnostic industry, with skills drawn from chemistry, biology engineering and ICT. Such work needs a suitable development facility to build on a strong skill base in which a wide range of biochemical and chemical processes are undertaken, alongside engineering control systems and devices, which in turn can be translated into manufactured systems. CeRRF works closely with Deakin’s schools of Engineering and Life and Environmental Sciences to develop this expertise. CeRRF also works on climate-smart agriculture, offering support to food producers in making decisions about patterns of land utilisation that will optimise productivity in the face of increasing climate variability.

Water Use Water is critical to our society. The recognition of its economic value has grown significantly since the millennium drought. Global demand for food is anticipated to double by 2050, and agriculture will need to drive this growth by using less water, energy and other inputs per unit of production. There is also the potential for increased competition for water between rural and urban customers, as well as the environment. CeRRF has strong water programs that drive productivity benefits in both the agricultural and urban water sectors. Focusing on production agriculture and utilising the latest on-farm technology, CeRRF research aims to drive more production using an equal share of water or less in each of a range of agricultural industries. With a research group located in the Riverina district of NSW, Australia’s irrigation hub, CeRRF is literally well-placed to achieve this goal. From an urban water perspective, CeRRF works with water utilities to drive productivity and efficiency and to improve risk management outcomes. Drawing from its strong technological knowledge base, CeRRF is applying novel solutions to drive better outcomes in potable, recycled and wastewater facilities alike. CeRRF is also looking to bridge the divide between urban and agricultural water use through the capture of wastewater from the urban environment for use in agricultural systems.

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09/AUSTRALIA’S EDUCATION SECTOR

Cutting-edge agriculture research in the centre of the city The inner-city campus of the University of Technology Sydney (UTS) seems like an unlikely hub for agricultural and veterinary research. But despite its urban setting, UTS is the only university in Australia with a ranking of five in both disciplines from the Excellence in Research for Australia (ERA) initiative, which benchmarks Australian university research against global standards.

TS’s commitment to excellence in these fields of research is evident in its world-class facilities and diverse research programs. From vaccine development and antimicrobial resistance to the application of big data to pressing agriculture challenges, UTS research is shaping Australia’s food, farming and livestock futures. ANIMAL HEALTH Intensive farming practices have resulted in a growing reliance on antibiotics to control infectious diseases and promote animal development and growth. However, overuse is leading the world towards a terrifying new era of antibiotic resistance. Professor Steven Djordjevic and his colleagues at the UTS Institute for Infection, Immunity and Innovation (ithree) are leading a series of research collaborations to deliver alternatives to antibiotics in the animal agriculture sector. In partnership with the NSW Department of Primary Industries, these researchers are conducting a series of projects focused on farm animals, including developing new vaccines for enzootic pneumonia, investigating how antibiotic resistance develops and travels in animal gut flora and exploring the colonisation of E.coli in different regions of the gut. “Ultimately we need a concerted effort by all of the world’s food producers to reduce the reliance on antibiotics in intensive food animal production,” says Professor Djordjevic. MEDICINAL HONEY A body of research led by ithree Director Professor Liz Harry has further demonstrated that manuka honey is a potential alternative to antibiotics in the treatment of wounds. The honey, which is derived from the Leptospermum scoparium plant in New Zealand, inhibits the growth of bacteria that cause wound infections and slow healing. Professor Harry and her team are now evaluating a number of Australian Leptospermum plants in order to identify and characterise species that produce honey with similar healing properties. To date, they have identified five species that produce honey with similar therapeutic activity to NZ’s manuka.

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This work has the potential to deliver new medicinal honeys to the global market, and to help tackle the growing crisis of antibacterial resistance in human and animal health. “Honey is an excellent example of how years of evolution can provide an effective, long-term medical solution, and our research supports the claim that bacteria are far less likely to become resistant to honey,” Professor Harry says. BIG DATA UTS is home to world-leading capabilities in digital technologies and big data analytics that have the potential to respond to a wealth of pressing agricultural issues. These include enhancing Australia’s ability to respond to the needs of the international market, improving farming and food production processes and showcasing the safety and sustainability of Australian food to consumers around the world. Flagship enterprises in this area include the UTS Advanced Analytics Institute (AAi) – the first research institute in Australia dedicated to data science and big data analytics – and Food Agility, a research consortium in which UTS is a contributing partner. AAi delivers real-world solutions to contemporary big data questions and assists industry partners to use data as a tool for effective business decisions. AAi researchers are internationally recognised for their projects across data mining, advanced analytics, bioinformatics and multimedia analytics. The Food Agility Collaborative Research Centre (CRC) is a prospective research venture that is currently being considered for funding under the Australian government’s CRC program. If successful, the Food Agility CRC will initiate a series of projects powered by digital technology to drive food production into the 21st century. UTS’s expertise in agriculture, big data and new technologies research makes the university a preferred industry partner within these discipline areas. As a world-leading university of technology, UTS will continue to deliver impact-driven, future-focused research outcomes that protect and enhance Australia’s food and farming practices.

Innovative teaching methods creating entrepreneurs At the University of Technology Sydney (UTS), an innovative new MBA program is focusing on authentic, experiential learning experiences. Developing the skills necessary to be a successful entrepreneur, the course maintains Australia’s track record of excellence and innovation in education.

Photo by Andrew Worssam

ocated in Ultimo – the heart of Sydney’s start-up scene – UTS Business School is one of the leading business schools in the country. Housed in the striking new Dr Chau Chak Wing building (designed by internationally-renowned architect Frank Gehry), the school has recently begun enrolment for a Master of Business Administration in Entrepreneurship (MBAe). Along with the UTS’s existing MBA courses, the MBAe is a response to labour market demands for more rounded students who excel in the ‘soft’ skills of communication, teamwork and networking. While the school’s traditional MBA and Executive MBA courses cater to people in management roles looking to round out their skillset, the MBAe is geared towards budding entrepreneurs. It is a year-long course that helps students harness their entrepreneurial ambitions, teaching them the skills to turn their start-up ideas into commercial reality. The average age of students in the current MBAe cohort is 34, and one of the conditions for admission is that students need to have a pre-existing start-up idea at the very least. Dr Jochen Schweitzer, Academic Director of the MBAe, says the course is designed to be as relevant as possible for students, with a very strong focus on the student’s own business idea. “The biggest selling point for prospective students is the ability for them to come in with their own idea, work it through a 12 month program, and come out of it with possibly a market-ready start-up,” says Dr Schweitzer. “Most

of what we do in the program relates to the student’s initiative or start-up – we try to make it as relevant and experiential as possible.” Dr Lan Snell, Director of Education Services at the UTS Business School, says that students in the MBAe are encouraged to ask the right questions in order to make the right decisions to commercialise their business idea. “Our role as educators is to help the entrepreneurial mindset emerge and to equip MBAe candidates with the skills to make their ideas commercially feasible,” says Dr Snell. “Most people are attracted to the idea, but ideas are cheap in the start-up world. The challenging part is making the idea work – that’s where we come in.” Students in the MBAe are taught the realities of starting and running a business: who to partner with, how to implement an idea, how to make it commercial, how to manage cash flow and how to read the market. Most importantly, students are able to put theory into practice by working on real-life problems with actual clients. UTS partners with a range of different clients who have issues in need of solving, and each semester the MBAe students are given the opportunity to collaborate with these clients and work on an issue that needs solving. This experiential learning process is built into the course, giving each student a deliverable task to answer their client’s brief. “It’s fantastic that we have this engagement and partnership with the industry – students are not working on a dead case study, it is very much a live program,” says Dr Snell. “These experiential learning skills are common across all our MBA products, and that’s what the market is really looking for these days.” By providing students with hands-on experiences in the real business world, the program not only gives them the necessary skills to manage a business, but also gives students a glimpse into the realities of starting an enterprise and prepares them for what lays ahead. “Ultimately what we want to do is create an economy and a society that is passionate about giving things a go,” says Dr Snell. “We don’t want to set people up for failure, but we want people to have a go and that’s what we see as the key difference of our program.”

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A history of education with an eye on the future of food security The King’s School is Australia’s oldest independent school, founded by the Royal Decree of King George IV in 1831. When it opened its doors in February 1832 at the eastern end of George Street in Parramatta, in a modest building down by the river, three little boys – James Staff, and James and Ebenezer Orr turned up to start a legacy.

here should have been a fourth boy – George Fairfowl Macarthur, who would become a future head of the school – but he was struck down with bronchitis. Young Macarthur was grandnephew of the great pastoralist John Macarthur, the Macarthur family immediately bestowing onto the school via their patronage the antipodean culture and values that comes from boarding and farming heritages. Upon the school’s opening, Archdeacon William Grant Broughton declared “The education received in The King’s School is not for the exclusive benefit of those upon whom it is bestowed, but for that of the entire community”. 185 years on, The King’s School remains true to its founder’s am-

bitions. ANTIPODEAN EXPERIENCE The character, culture and nature of The King’s School remains authentically Australian. Newly commissioned as 20th Headmaster of the school, Mr Tony George describes his perspective on the school in the twenty-first century: “If we are authentically Australian, in this century that can mean many things – Indigenous Australian, white Anglo-Saxon rural Australian, new Australian-born Chinese, third generation Australian merchants. ‘Australian’ becomes a very racially-oriented term under those circumstances. “If we use the term ‘antipodean’ we immediately relate to that sense of people of Australia and New Zealand being people at the opposite end of the world. Outdoorsy, problem solving, adventurous, as comfortable outside as much as we are comfortable inside. Something that’s earthy and grounded in our antipodean lifestyle. “I think that when the world today is looking to Australia, it’s that antipodean experience that they want from an Australian education. King’s, of all the schools available in Australia, is uniquely placed to offer that authentic antipodean grounding to humanity”. AS COMFORTABLE IN THE OUTBACK AS THE BOARDROOM The King’s School has remained true to its founding heritage. These days, the school has the capacity to enrol as many as 400 boarders in a total population of 1800 students at its North Parramatta campus. This population expands by another 100 board-

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ers and 200 day students at the Tudor House campus at Moss Vale in regional NSW. “With the 360 acres at North Parramatta, 160 acres at Tudor House and a further farm of 13000 acres in Futter Park at Harden in NSW, there are very few schools that are positioned with that kind of heritage,” says Tony. “This means our students are just as comfortable in the outback cattleyard as they are in the city boardroom.” AN EDUCATION IN FOOD AND AGRICULTURE In his contemplation of a vision and strategy for the future of the school, Tony George says that it’s not difficult to suppose that The King’s School must continue on its established trajectory. “Australia is still a very rural country – our aggregate agricultural production is in the top five exports for this country, along with education,” says Tony. “To be Australian, to be antipodean, is to have an understanding of the grounding and foundation of our economy. We need to be sensitive and informed about where our food is coming from and where our school is going to. “The challenge for King’s presently is figuring out who we are, versus who we might be.” The King’s School is committed to a new partnership in education and private enterprise known as ‘The Future Project’. The Future Project is about enriching the study of sciences, technology, engineering and mathematics by partnering with universities and private sector research firms to allow King’s students to work on genuine research projects designed to solve problems and create a sustainable future.

One area of study being undertaken in The Future Project is in food sustainability. Sydney-based scientific research company Quantal Bioscience and King’s students of have been working on a study of the effect of supercooling on the shelf life of foods. The study hopes to discover the next generation of food preservation techniques without resorting to chemical imbalance. The study is in its early days and early results, while optimistic, need further work. A FUTURE IN FOOD SECURITY Headmaster Tony George sees this as the path The King’s School can travel down as it considers how education might have an impact for the good of society. “We should be considering if we extend this notion emerging from The Future Project and take it to its fullest extent. We should have a greater emphasis on education in food production and security as a holistic focus of our education offer,” says Tony. “Our boys don’t all need to be in agricultural classes, but boys studying economics can place emphasis upon the role of food production in our economy and in the world economy, for example. “It’s not unrealistic to consider that at some point King’s might develop its own food precinct with faculties dealing with food security and agricultural economics. We can offer residential education in these disciplines right now, either here at Parramatta or at Tudor House. What is certain about our future is that a King’s education will continue to be is not just for the exclusive benefit of those upon whom it is bestowed, but for that of the entire community.”

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QATC prepares ag workers of the future As the agricultural industry modernises and embraces innovative technologies and business models, agribusiness careers are changing and encompassing a more diverse range of roles. To prepare students for this future, Queensland Agricultural Training Colleges (QATC) offers a mix of practical skills training and classroombased learning to deliver skilled employees to rural industries and regional communities.

ATC commenced operations in 2014, but has a history that stretches back 50 years in Queensland to the establishment of Longreach Pastoral College. An amalgamation of Queensland’s agricultural colleges occurred in 2005, and in 2014 the corporation became statutory and was renamed the Queensland Agricultural Colleges. QATC now operates a network of training hubs across the state. With global food production needing to double by 2050, QATC’s goal is to support that growth and be a flagship enterprise for technological training and adoption in the industry. Offering a diverse range of courses in everything from livestock management and cropping to farm safety and land conservation, QATC provides courses for high school students right through to those studying a PhD. “Our focus is a ‘cradle to grave’ emphasis on learning – learning opportunities can be established with us as early as grade 10, and can be completed on the day of your retirement 50 years later,” says Mark Tobin, CEO of QATC. “In your learning lifetime, you can study everything with us in terms of qualification from Certificate right through to PhD, and also undertake specific skills training and updating throughout your career.” Faced with a changing employment landscape in the agribusiness industry that now offers a wider range of careers, QATC has seen a demographic shift in its cohort over the last few decades as modern students pursue higher education – and even research-based – qualifications. And a considerable proportion of these students are now coming from non-agricultural backgrounds. “The perception of agriculture being a hard place to work is now being replaced as the industry modernises,” says Mark. “Stu-

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dents are beginning to think, ‘I can use my science or business skills in this, I’ll have a good working life that will be rewarded appropriately and, more to the point, I’ll be making good things happen’.” Like any other industry, agribusiness is adopting technology at an increasingly rapid rate. People involved in the sector will soon be required to be technologically proficient, but still have a practical skills and knowledge base, and this is the foundation on which QATC focuses its offerings. Keeping one eye on the future, QATC prepares its students by integrating hands-on practical learning with digital platforms and trialling pre-commercial and commercial agribusiness solutions. QATC uses partnerships with organisations such as CQUniversity (see page xx) and AgForce, among others, to add value to its courses and enrich the future of the industry. “The reason we are supporting and investing in agri-related technologies is the industry itself has woken up and is now starting to realise that technology is not its enemy,” says Mark. “If the industry is to survive, agribusinesses of the future will be technologically-based businesses, and therefore QATC must showcase tech savvy production systems.” After all, education and training of the next generation is essential to the health of the agribusiness industry in the future – and this is a role that Mark and QATC definitely do not take lightly. “What I want to see my children and grandchildren doing when they come into agriculture is that they have a long-lasting career,” says Mark. “With the involvement of science and business, I hope they are able to grow and develop over time in a career in agriculture that could see them in any number of rewarding positions over their working life.”

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CQUni leading the way with new ag degree Central Queensland University recently started enrolling students for Australia’s most practical and hands-on agricultural degree. Based in one of Australia’s richest and most diverse agricultural regions, these students will have access to an unrivalled range of industry partners.

ith campuses in more than 20 locations spread around the country (the majority in the towns of Central Queensland), Central Queensland University (CQUniversity) is the largest regional university in Australia. And it is the premier agricultural research university in Northern Australia – no surprise given the region is the centre of Australia’s northern beef industry, produces the majority of Australia’s tropical and subtropical fruit and vegetables and also supports large cropping industries harvesting sugarcane, cereals and cotton. In 2015, CQUniversity drew on its research strength and fertile surroundings to create a new Bachelor of Agriculture course and designed it to be Australia’s most practical and applied agricultural degree. The three-year course combines hands-on training with a strong research base, and is available at its Bundaberg, Emerald and Rockhampton campuses. “In starting this course we were responding to industry demand,” says Professor Fiona Coulson, Dean of CQUniversity’s School of Medical and Applied Sciences. “We deliberately designed a degree that not only built on our research strength but also included some very strong practical skills.” The course provides students with a strong foundation in animal production, horticulture and agribusiness, and allows them to specialise in the subject area of their choosing. The hands-on skills development is not limited to farming activities, but includes practices required for a range of careers in agriculture, from research and production to agronomy and policy development. These skills are developed through mandatory industry placements in the second and third years of the course. “We’re making sure that we’re keeping the balance between theory and practice,” explains Professor Coulson. “The skills focus of the course is enhanced through the placement program, ensuring students get the industry-relevant skills that they need.” Students can specialise and focus their studies by selecting minors in: n Agricultural Business – combining the study of agricultural science with various business disciplines such as management and finance n Cropping – focusing on irrigation systems, strategies to ensure crop nutrition, appropriate usage of fertilisers, crop rotation, yield improvement and enterprise planning n Livestock – developing knowledge of contemporary livestock management systems with an emphasis on sustainability, animal welfare and organic and free range methodologies. Another key component of the course is ensuring students are capable of adapting to changing agricultural practices as the use of technology becomes more integrated and widespread. “We’ve really been looking at preparing students for a wide range of ca-

reers, rather than one particular career,” says Professor Coulson. “A big focus is to make students technology-literate and really look at how they can use technology and data in agriculture to enhance production.” CQUniversity’s Institute for Future Farming Systems (IFFS) was established in 2015 at its Rockhampton campus to provide students with a better understanding of the growing application of technology and data in the field. Designed to bolster the university’s existing research capacity in agriculture and to encourage success in agricultural industries, the IFFS utilises world-class laboratory and field facilities to focus its research around three main themes: Precision Livestock Management, Precision Horticulture and Non-Invasive Sensor Systems. Focusing on these three themes, researchers at the IFFS are collaborating with agribusinesses to provide hi-tech solutions in areas ranging from pest management and individual animal monitoring to soil quality and crop stress. “We’re right in the middle of what I regard as Australia’s best agricultural area, living in the same community and directly interacting with our industry partners,” says IFFS Director, Professor Phil Brown. “That’s a real advantage – agricultural research that’s done when you’re a member of your community is much more powerful than fly-in, fly-out research.” CQUniversity utilises this regional strength to not only produce industry-relevant research, but also to ensure students in its new Bachelor of Agriculture course develop the necessary range of skills to work in the field. Undoubtedly, the future of agriculture is in good hands in Central Queensland.

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Australiaâ&#x20AC;&#x2122;s Leadership in Soil Health In agriculture, everything comes from the soil. Managing Australian soil assets to ensure their viability and sustainability is one of the great challenges of our time. Showing global leadership on this issue, Australia appointed Major General Michael Jeffery in 2012 as the worldâ&#x20AC;&#x2122;s first Soil Health Advocate.

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Soil health: if you eat, you’re involved Australia’s first Advocate for Soil Health, Major General the Honourable Michael Jeffery, is leading the charge to involve all Australians in the future of soil health. He has a simple message – if you eat, you’re involved. He sat down with KEIRO N CO ST ELLO to discuss the role, its importance, its challenges and the future.

hen asked to describe his role as Advocate for Soil Health, General Jeffery cuts right to the chase. “My job is to excite the interest of the Australian public to get behind their farmers,” he says. “Firstly this should be by paying them a fair price for their product, but also rewarding our 130,000 farmers for looking after over half of the Australian landscape on behalf of 24 million urban Australians.” After a distinguished military career during which he served in Malaya, Borneo, Vietnam and Papua New Guinea and rose to the position of Deputy Chief of the General Staff, General Jeffery then spent seven years as the Governor of Western Australia before being appointed Governor-General of Australia in 2003. After his term as Governor-General ended in 2008, he was appointed by then-Prime Minister Julia Gillard as the National Advocate for Soil Health in

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2012, a role intended to raise public awareness of the critical role soil plays in sustainable agriculture. According to General Jeffery, his interest in agriculture and the knowledge gleaned from his history of military service led him to take on the role. “Being a soldier who has seen a fair bit of the world and fought in various overseas campaigns, it seemed to me that the next big problem the planet is going to face is food and water security,” says General Jeffery. “And while terrorism and the financial crisis obviously occupy the here and now in people’s minds, I think it’s going to be the food security issue that will outstrip both of those in terms of unpleasant consequences.” “I have ten grandchildren and it seemed to me they would be unforgiving of their grandparents if in 20 or 30 years they felt that we were aware of the seriousness of what was happening but did nothing about it.” We have to understand that a healthy soil is integral to sustainable food and fibre production, and a clean and adequate water supply. As such, General Jeffery sees his appointment as the National Advocate for Soil Health as a support role for Australia’s farmers. The position involves plenty of public speaking, giving several speeches each week to a variety of audiences from farming groups to universities and from Landcare groups to Rotary districts and school children. In every speech, he drives home the message that national wellbeing depends largely on our understanding of soil function – and as our farmers look after about 60 per cent of the Australian landscape, we should ensure they have the knowledge base and the incentive to properly manage our soils. “Everything we eat and our fibre comes from the top 6-12 inches of the earth’s crust, and if we don’t look after that top soil adequately, we are going to get ourselves into trouble. This is particularly the case with a rapidly expanding global population, decreasing availability of arable land, decreasing access to water and the increasing cost and overuse of chemicals and fertilisers,” says General Jeffery. One key to improving Australia’s soil health is understanding existing problems and how they originated. The European settlers in Australia used the methods with which they were most familiar, but clear felling, filling in wetlands, overgrazing and destroying natural watercourses have had a severe impact on soil health, including loss of essential soil carbon.

Throughout the years, industrial agriculture utilising inorganic chemicals, fertilisers and pesticides, fallow ploughing and monoculture crops helped boost Australia’s wool, wheat and fibre production in the short term. However, these processes had a negative impact on soil health – an impact which is being exacerbated by climate change. “What we have to be careful about is that we don’t reach a tipping point in respect to soil and water management where we will be unable to deal with the problem,” says General Jeffery. “That’s where I think a lot of people make a mistake: they say, ‘we’ve always had droughts and we’ve always had fires’ – they’re missing the point; we’re having more frequent and larger droughts and hotter fires that increase carbon dioxide emissions into the atmosphere.” “The predicted two degrees of average temperature rise might now be unstoppable – which is serious enough in terms of impact – but if we start getting into three and four degrees then we are getting into global catastrophe. That’s what we’ve really got to protect ourselves against, and I think the best way of doing this is by replenishing the health of the soil, which means cooling it by retaining more moisture in the soil and by planting every square inch of our landscape (including our cities) with permanent green cover.” For General Jeffery, fixing Australia’s soils starts with a philosophy of fixing the paddock. To do this, the not-for-profit environmental organisation Soils For Life (www.soilsforlife.org.au) was established with General Jeffery as founding chair and a board that includes NFF President Brent Finlay and former NSW Leader of the Liberal Party Peter Debnam. Soils For Life encourages adoption of regenerative landscape management practices and has produced 21 case studies showcasing innovative farming systems driving both profitability and sustainability. General Jeffery intends to expand the project to 100 case studies over three years to provide a long term national research and innovation measurement base across the total spectrum of Australian agriculture. The second requirement to improve soil health in this country is to develop a national policy. “We do not have a national policy on looking at how

we are going to restore and maintain an Australian landscape that is fit for purpose: fit for agriculture, fit for mining, fit for urban, fit for regional development and so on,” says General Jeffery. According to General Jeffery, the three key components of a healthy landscape are the soil itself (particularly the microbiology in the top 6-12 inches), water (how it can be retained in the soil) and biodiversity (because it is a mixture of plants rather than monocultures that enhance soil fertility). “Soil, water and biodiversity are so important they should be declared as national, natural strategic assets to be managed accordingly,” says General Jeffery. “That would lift the whole ball game in the public mind; we would see our soil and our water and our plants in a totally different light.” If these three components are declared strategic assets to be managed in an integrated way, then Australia’s 135,000 farmers – who look after 60 per cent of the landscape already on behalf of 24 million urban Australians – are best suited to manage them. General Jeffery proposes two measures to compensate farmers in this stewardship role. “We have to pay them a fair price for their product, and then reward or incentivise them in some way for looking after the health of the agriculture landscape on behalf of urban Australia,” says General Jeffery. As Advocate for Soil Health, General Jeffery will be reporting to the Prime Minister and other government leaders. Balancing the needs of farmers, governments, rural communities and other industries is a tricky job, but one General Jeffery is not afraid to take on. “I don’t think I’ve ever taken on a worthwhile job that’s been easy and nor have I taken on a job where you just flick a switch and it all becomes light – that’s not life.” And while General Jeffery is the figurehead of the push to improve Australia’s soil health, it is a task that needs to be undertaken in some capacity by every Australian, be they city or country dwellers. General Jeffery’s message is simple: “To save the planet, we must save the soil. If you eat, you should be involved.”

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Radical soil management for Australia: a process of rejuvenation Australia is a developed country with old soils. It is unique in this regard. What can we do about this? Are the soil management and improvement processes currently used in agricultural production in Australia capable of rejuvenating the soil, or is the use of more radical management techniques needed?

ustralian soil has been referred to as hostile, and has numerous constraints that can severely limit agricultural yields. Much of the continent has highly weathered soil of great antiquity, resulting in poor farm productivity. There are several natural processes that contribute to soil ageing and affect soil quality, including: n Weathering n Loss of materials (including through leaching, when such materials are filtered out by water) n Eluviation (the movement of material from one layer into another via rainfall) n Illuviation (the accumulation of materials leached from one layer into another) As a result of these and other natural ageing processes – and perhaps exacerbated by decades of misuse – there are several issues that commonly plague Australian soils. They include: poor structure for water movement and root growth; a dearth of natural nutrients; a toxic concentration of elements; a lack of organic matter in the topsoil; topsoil that repels water or is hard-setting and therefore constricts water flow; acidic topsoil or subsoil; a marked texture contrast between the topsoil and subsoil; highly alkaline or saline subsoil; and dense and poorly permeable subsoil. When coupled with a climate that is often hot and dry with frequent periods of drought, these soil conditions can markedly constrain crop yields. But that doesn’t mean that these soils cannot be rejuvenated and significantly improved – both through human intervention and natural processes. A rejuvenated soil is one where the effects of ageing are reversed, enabling it to provide the physical and chemical conditions desirable for optimal agricultural production. Soil rejuvenation events can occur naturally in Australia, or they can be brought about through radical soil management. Any process that reverses the ageing process of soil differentiation can be considered to be a rejuvenation event. For instance, something as simple as a more rapid depositing of fresh materials than is natural represents a reju-

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venation process. Perhaps counter-intuitively, erosion also represents a rejuvenation process because the less weathered part of the regolith – the loose layer of rock and dust that covers bedrock – finds its way closer to the surface. Other natural examples of soil rejuvenation processes include: n Aerial additions n Alluvial (material deposits formed by flowing water) and colluvial (material deposits formed by gravity at the base of a hill) additions n Geological additions such as volcanic ash n Geological removal of weathered material n Self-mulching, wherein the soil material constantly mixes itself In terms of human intervention spurring soil rejuvenation, one can look at wheat production for a clear example. For wheat crops, a young or rejuvenated soil is considered to be more productive and better yielding. Thus, human interventions such as the addition of clay that can rejuvenate the soil can be considered radical soil management. Due to the advanced age of Australian soils, Australian cereal production is below that of most developed and developing countries on a tonne-per-hectare basis. Australian wheat production was 1.6t/ha in 2009-12, one of the lowest rates in the world. For comparison, wheat production in the US was 2.6t/ha, an average of 6t/ha across Europe and 3.2t/ha on average around the world in 2014. Further straining Australia’s wheat production is the typically dry climate prevalent across the country’s wheat belt. This means that maximising the efficiency of water use is hugely important, but a number of common features within the wheat belt affect this effort adversely: poor surface structure, low clay content and the presence of hard-setting soil with a marked texture contrast between the topsoil and subsoil. Potential yields of wheat are greater in soil without such water use limitations, such as in soil that has uniform clay content. Improving the water use efficiency of soil for wheat production in Australia requires modification of the constraints limiting the soil. Traditional methods for improving severe physical or chemical deficien-

cies will not necessarily lead to sustainable production. Radical soil management techniques may seem outlandish – they are, by definition, radical – but they can potentially lead to significant improvements in water use efficiency and therefore crop yield. Here a few such strategies: n Incorporating clay: The poor sandplain soil (with very little clay) of the wheat belt of Western Australia has benefited from the incorporation of clay from elsewhere. The mixing of this subsoil clay with unproductive topsoil (a process known as “claying”) has contributed to increased wheat yields by, among other things, improving water retention and increasing the pH level of the soil. This practice of adding soil with better physical and chemical properties from elsewhere to the local topsoil is a radical management strategy that rejuvenates depleted topsoil. n Deep ripping: The concept of soil rejuvenation requires mixing soil materials, not just disturbing the existing soil. Deep ripping is essentially a process of disturbing the soil at depth without necessarily mixing it. The long-term yield increases of deep ripping depend on the particular treatment scheme and further, sometimes costly, maintenance is often required. n Delving: Delving raises clay-rich subsoil into the sandier topsoil. This subsoil can then be incorporated, mixed and spread by various processes (e.g. spading or ploughing) to result in improvements to water holding capacity, fertility, organic matter, wind erosion and subsoil compaction. n Chemical rejuvenation: Several researchers have used basalt dust to chemically improve soil, describing the effects as soil rejuvenation. Ground rocks and granite powder can also be used to chemically and physically improve soil. Highly weathered soil can be chemically rejuvenated by the addition of fertiliser, by geological processes or by radical soil management practises such as the addition of potassium-rich clay from elsewhere. (It is important to note that the addition of chemical fertilisers to topsoil would be standard practice and is not considered radical.)

The effects of soil ageing in Australia are shown across soil types and are influenced by several factors, including the soils’ initial compositions and subsequent formation. Processes that reverse the ageing effects of nutrient-poor and highly leached soil types may occur naturally or may be induced by human involvement. Processes that include mixing subsoil with topsoil – with or without the incorporation of various additional materials – can be considered as radical soil management practices acting to rejuvenate soil. In contrast to the radical physical and chemical soil management practices listed above, radical biological improvements that give immediate yield gains have yet to be identified. It has been suggested that perhaps burying organic carbon (because of its associated biodiversity) would improve the overall soil health in the long-term. It seems that biological improvements act on a longer timescale (as can be seen with minimum tillage and crop rotations) and provide slower gains than the relatively rapid ones already seen emerging from physical and chemical radical practices. Perhaps radical soil management practices will evolve to find an optimal balance to leverage benefits from physical, chemical and biological approaches in the long-term. Because so much of Australia’s agriculturally used soil is of advanced age, in order to increase food production to meet ever-increasing global demands Australia needs to adopt more widespread radical soil management practices that mimic natural rejuvenation processes and reverse soil ageing. Other parts of the world that have similarly highly weathered soil, such as Africa and South America, may also benefit from radical soil management practices and thus potentially play an increased role in meeting the global demand for food. This article is adapted from a report titled Radical soil management for Australia: A rejuvenation process by Alex McBratney, Tony Kopp and Damien J. Field. It was published by the Centre for Carbon, Water and Food at the Faculty of Agriculture and Environment, University of Sydney in 2016.

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The great soils debate Australia’s soils have been degraded over the last 200 years. WALT ER J EHNE of Healthy Soils Australia asks how we should regenerate our soil – by natural methods or by engineering another green revolution.

ustralia has 770 million hectares and less than 24 million people. On those numbers we would seem to have ‘boundless plains to share’. But while Australia may have 20 times more land per person than the global average, what really matters is the capacity of that land to sustain all the needs of each person, and not the relative area. The key question is whether the land and its soils can sustain the essential water, food, clean air and services that we need for our health and survival. Can our land and its soils deliver these essentials in the face of increasing climate extremes, limits to fossil fuels, demands on water and other resources, land degradation and ever higher population pressure and demand? We cannot escape these realities, so how can Australia and its soils deliver? How can we manage the soils of our boundless plains so we can share and deliver the outputs we need? There is no question that we must regenerate and sustain the health of our soils and landscapes so they can not only supply these needs, but also provide the knowledge and wisdom to help others do it as well. We need to address not only Australia’s current and future food security needs, but to ensure: n The secure supply of adequate affordable food for each individual and the whole population n The ecological sustainability of how that food is produced to underpin its supply security n The economic viability and social equity in how that food is produced to sustain its supply n The autonomy of localised food production so it is less vulnerable to risks n The nutritional integrity and quality of the food produced to maximise its health benefits. Given these critical performance outcomes, what role should Australia’s soils play in meeting them and how can we best regenerate and manage our soils to help deliver these values? The Aboriginals’ skilled care of the Australian landscape enabled them to prosper for over 50,000 years, despite climate extremes and resource limits. By contrast most human civilisations over time – less attuned to ecological

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limits – failed. There is ample evidence of this in the dusts of archaeology and over 5 billion hectares of man-made desert. Some of the greatest civilisations of antiquity vanished because they followed unsustainable soil husbandry. How we manage our soils and our land matters. While our challenge of sustaining what will soon be 10 billion people on the planet is vastly greater, understanding why civilisations prospered or perished may be critical in sustainably managing our soils and meeting this challenge. As US President Franklin Roosevelt warned at the time of the infamous Dust Bowl: “A nation that destroys its soils destroys itself.” But there is debate over the best way to maintain our soils. There are differing views on how we can best manage our soils to secure these outcomes. What was the natural condition of our soils that enabled the evolution of Australia’s highly resilient and productive biosystems, despite their resource limits and our dry, variable and extreme climate? What have we done to these soils and the processes that governed this resilience and productivity? What must we do to regenerate these or otherwise sustainably secure key soil outcomes? How do we best do this given our understanding, technological capabilities, and impending crises? Can we best meet our challenge and its desired performance outcomes at minimal risk, via either another engineered high technology green revolution, or via the ecological regeneration of the natural processes that govern soil health and outcomes? To answer these questions we must first recognise the unique aspects of Australia’s soils and landscape. THE DRIEST CONTINENT Relative to most other continents, many of Australia’s soils have developed on very old rocks and marine sediments that have been leached of, and retain low levels of, the essential mineral nutrients needed for plant growth. They are often highly oxidised, weathered, acidic and have high salt levels. Furthermore, much of Australia receives relatively low rainfall, with an annual average of just 450mm. In most places this is also very variable in both its reliability and intensity, often causing acute floods or droughts.

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To overcome these constraints, Australia’s soils and the biosystems that evolved and adapted to grow on them naturally-selected, sophisticated means to repair, solubilise, access and recycle the often very low levels of available soil nutrients so as to sustain plant growth. Our soils and biosystems similarly evolved sophisticated means to harvest, infiltrate, retain, efficiently use and recycle all rainfall and moisture in order to sustain plant growth and maximise their drought resilience. In large part these adaptations were made possible by the evolution and selection of a range of: 1. Unique microbes, particularly fungi that were able to fix, solubilise, access and recycle the limited supply of plant nutrients from these rocks and soils to sustain plant growth 2. Highly adapted microbes that were able to biodecompose the often sclerophyllous plant debris in situ or in the intestines of herbivores to aid the formation of stable soil carbon 3. Highly adapted plant species able to form symbioses with these microbes so as to access these essential nutrients for their growth and increased organic matter production. This microbial formation of soil carbon has been critical in enhancing the structure, and thus the rainfall infiltration, retention and sustained water supply capacity of soils. The formation of organic matter in these soils also aided the retention and availability of plant nutrients and the microbial fixation, solubilisation and recycling of essential plant nutrients. These improved soil structures also enhanced the aeration and reduced the hardness of these soils, enabling roots to spread wider and deeper, helping plants to access essential water and nutrients and enhance their resilience. It is these microbial processes and their resultant high soil carbon levels – as well as the subsequent water and nutrient availabilities – that enabled productive resilient vegetation and their associated herbivores to proliferate over all of the Australian landscape, despite Australia’s variable and often arid climate. It is these microbial and soil carbon processes that underpinned the extensive soft, high-carbon soils that European explorers recorded throughout Australia. These processes also sustained the highly productive biodiverse grassy woodlands, wetlands and forests that gave rise to Australia’s ‘boundless plains to share’. It was these soils and this protective shelterwood vegetation that ensured that over 90 per cent of our low and highly variable rainfall was retained and protected from evaporation in Australia’s soil carbon sponges, in soil reservoirs and flood plains, and not lost out to sea. It was these soils that enabled Australia’s highly adapted vegetation to efficiently access that water to sustain the longevity of its green growth, resilience and our extensive periodically ‘green deserts’, despite climate extremes. WHAT HAVE WE DONE? This hydrology and sustained green vegetation also greatly buffered and moderated our climate, extending weather systems such as the Australian Monsoon across northern and inland regions. So what have we done to our soils and biosystems over the past 220 years to change this? The early colonists were awe-inspired by the open grassy parklands of what explorer and pastoralist Thomas Mitchell called ‘Australia Felix’ – Fortunate Australia – and the ease with which their pastures could be converted into wool and profitable exports back to Europe. But just 50 years of continuous grazing by vast herds of sheep – and then cattle – changed things considerably.

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The metre-high perennial grasslands were turned into thinly grassed plains on compacted dry or bare soil that often eroded down to subsoils, or incised to form over one million kilometres of creek beds that drained and aridified many former surface wetlands, flood plains and slopes. In their natural form these pasture soils often contained up to 20 per cent organic matter, as the explorer Paul Strzelecki observed in 1842. But continued overgrazing oxidised much of this carbon, leading to the structural collapse and erosion of soils with the residual compacted subsoils now often containing less than one per cent organic matter. The residual low grass sheds most of the more variable rainfall, further aridifying extensive biosystems and regions. Inquiries into Australia’s pastoral industry and rangelands at Federation in 1901 confirmed this degradation and the urgent need to regenerate the natural health, resilience and productivity of soils nationally. With the extension of grain cropping, similar rapid declines in yields occurred as organic matter levels, soil structures, rainfall retention and nutrient availabilities declined along with their resilience to drought and topsoil loss from wind and water erosion. Previously highly fertile black clay soils – on for example the Darling Downs in southern Queensland – often lost 200-300 tonnes of topsoil per hectare in periodic storms. Efforts over the early 20th century sought to arrest and reverse this widespread soil degradation and productivity loss in both pasture and cropping systems. This was attempted through the use of fertilisers (especially superphosphate), clover leys, cover crops, conservation tillage and soil conservation works. But the resilience and productivity of the residual soils and biosystems still lag far behind their former natural condition. With the intensification of industrial agriculture since World War Two, farmers and scientists have learnt how to grow more productive pastures and crops on these residual degraded subsoils. This has occurred mostly via the use of increased cultivation, fertilisers, biocides, irrigation and the selection of plants and animal systems better adapted to secure yields and economic returns from such higher inputs. But these ‘engineered green revolution’ approaches have also made these yields and farming systems more dependent on and vulnerable to these sustained high inputs and their rising cost. Much of our industrial agriculture now depends on the continued subsidised input of up to ten units of fossil fuel energy for each unit of food energy produced, and is not viable without this subsidy. If physical or economic limits are reached, these inputs can no longer be provided. More seriously, many of these engineered industrial farming systems continued to seriously degrade soil carbon, structure, water and nutritional processes and values, via their oxidative or toxic effects. In many cases they are effectively mining soils, retaining it as a mineral substrate to support plants by their roots that they have to feed hydroponically via expensive fertiliser, irrigation and biocides. No consideration is given to the natural capital value of or ecological outputs from the residual soil or the cost of its regeneration given that it is a finite and critical natural and national strategic asset. WHAT IS THE COST? What cost must we put on this degradation of our former sustainable soils, and via this, ourselves? Is there a more effective, sustainable way to meet our food and social needs that does not dictate the degradation of the soil we depend on, consigning both soil and us to the dust of archaeology? Fortunately there are more effective, sustainable ways to meet all our food and ecosystem services needs, provided we focus on regenerating the nat-

ural former health of our soils and landscapes. Despite minimal inputs and dry, aridifying climates, we need to understand, respect and use the unique processes that nature evolved to enable highly productive and resilient soils, agro-ecosystems and landscapes to prosper. We can do this, but only if we restore the unique soil microbiological processes, soil carbon levels, hydrology and nutrient cycles that enable and underpin our soil health and productive landscapes. Nature can do it, via its colonisation and maintenance of productive biosystems across the land surface of old leached soils and harsh arid climates. So can we. We can rapidly regenerate the health, hydrology, nutrition, resilience and productivity of the residual soils and landscape by simply progressively restoring the former high stable carbon levels and structure of these soils. As in nature we can do this simply by limiting the oxidation of whatever plant matter can grow back to CO2 and instead bio-convert it microbially into stable soil carbon, either in situ or via the gut of a herbivore. In so doing we can limit the bushfires that burn and oxidise 30 million hectares of Australia each year, and instead biosequester that carbon into soils so as to avoid the degradation of these biosystems. In doing so, we can restore the natural rainfall infiltration, retention and sustained availability from these soil carbon sponges and in soil reservoirs to enhance the longevity of green plant growth and further carbon fixation. By doing this we can restore the natural availability and recycling of essential plant nutrients, even in soils with limited total pools, so as to further aid plant growth and carbon fixation. Just as nature via these processes enables rainforests in Australia to grow on sand dunes (a paradox of the world’s most productive terrestrial biosystems growing on soils of minimal nutrient content), so too can we use the same processes to regenerate and sustain productive agro-ecosystems with minimal inputs, while also restoring the health and resilience of our key natural asset: the health of our soil. WHAT SHOULD WE DO? Leading innovative farmers from across Australia are demonstrating how regenerative land management practices can restore the former soil carbon levels. Through that they regenerate positive feedback benefits via enhanced hydrology, nutrition, longevity of green growth, resilience and still further carbon biosequestration. These include graziers in all states that enhance yields and capital values, greatly reduce costs and risks by sequestering up to ten tonnes of carbon per hectare per year. They include innovators who, due to their high soil carbon and water retention, can sustainably grow premium grain crops on rainfall as low as 150 mm per year, while nearby crops under high input industrial agricultural systems fail. They include leaders who are integrating natural shelterwood regeneration in their grazing and cropping systems to reduce desiccation and enhance carbon sequestration and nutrient supplies. They include ecological innovators who integrate grazing with opportunistic crop production to mutually aid the productivity of both plants via synergistic carbon enrichment and nutrient recycling effects. Some of these innovators and outcomes are outlined in the ‘Soils for Life’ case studies and website (www.soilsforlife.org.au). Extensive further science and economic evidence substantiates these processes and their outcomes. Collectively they provide a compelling case of Australia’s unique natural competitive advantage in enabling us to meet the food integrity needs of Australia and other regions, via both the increased supply of high quality

premium food and also the provision of knowledge in how such natural ecological processes can be harnessed and refined to do this. They confirm that Australia has not just ‘boundless plains to share’ physically, but also intellectually, via the credible practical options being refined via our innovative farmers to deliver such outcomes. But we are short of time – time to demonstrate, implement and extend the adoption of these ecological soil regeneration and land management practices before climate extremes, resource limits, soil degradation and population demands overtake our ability to realise the regenerative and preventative imperatives we can enable through these innovations. We therefore need urgent national action to refine, demonstrate and extend these practices. Urgent action could be aided greatly by working closely with the strategic beneficiaries of these innovations, in close production joint ventures, market and value capture relationships. Indeed, such closer relationships may end up being the most fruitful outcome from our ‘boundless plains to share’, in that they provide the market drivers and help us regenerate our soils and landscape to sustainably meet the food needs of humanity. There should be no debate over these imperatives. It is an inescapable reality. We need urgent action to regenerate the health of our soils and landscape as our only means and last chance to restore productive agro-ecosystems, feed the ten billion and secure our safe future.

“At the University of Melbourne we prioritise collaboration. Now more than ever, collaboration between Australia and China in research, education and continuing professional development of scientists and agribusiness professionals is vital for agricultural innovation. Key alliances with the Chinese Academy of Science, China Agricultural University and Nanjing Agricultural University will allow Melbourne and these partners to conduct research and develop technology to secure safe and sustainable food production in Australia, China and around the world. Our future is better together.” Professor Deli Chen, Director (China) of the Faculty of Veterinary and Agricultural Sciences at the University of Melbourne

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Efficient soil management a win-win for agribusinesses and the environment The application of nitrogen fertiliser in agriculture is essential for world food production – about half of the world’s population would not survive without it. But when fertiliser is applied to soil it is not used efficiently, and plants rarely use more than half of the added nitrogen.

ost nitrogen is not only a serious economic problem for farmers, but damages the environment and affects human health. Professor Deli Chen’s research at the University of Melbourne is recognised for improving our understanding of not only how nitrogen fertiliser becomes the greenhouse gas nitrous oxide, but also how different agricultural systems affect nitrogen emissions. He has also led the development of management practices to reduce nitrogen losses. Professor Chen is the Head of the Crop and Soil Science Section in the Faculty of Veterinary and Agricultural Sciences and Director of the Australia-China Joint Research Centre, Healthy Soils for Sustainable Food Production and Environmental Quality. He is also a member of the International Nitrogen Initiative (INI) Executive Committee and is on the editorial boards of the international journals Nutrient Cycling in Agroecosystems, Nature Publishing Group’s Scientific Reports, and the Chinese Journal of Eco-Agriculture. Professor Chen’s soil science research has gained international recognition. By combining field measurements and modelling, he quantified key water and nitrogen changes for the first time in China and showed that 30 per cent of irrigation water and 48 per cent of applied nitrogen was lost within two days of application. From these results he developed the internationally-acclaimed water and nitrogen management model (WNMM), which simulates all key processes of water and nitrogen in soil and plant systems. Based on the WNMM model, he developed a geographic information system – known as the Decision Support System – to optimise irrigation and fertiliser use. This led to significant improvements in the efficient use of nitrogen fertiliser in irrigated maize and wheat, and has already been adopted by 10-15 per cent of Chinese farmers. This has reduced the use of urea (the most common nitrogen fertiliser) by more than two million tonnes. The Australian Centre for International Agricultural Research assessed the economic benefit for Chinese farmers at $A216 million (¥CN1.05 billion). Professor Chen was the first to use micrometeorological techniques in Australia to study greenhouse gas emissions from cattle feedlots, finding that 75 per cent of the carbon ingested by cattle as food was lost as methane and 70 per cent of the nitrogen ingested as food was lost as ammonia, an indirect greenhouse gas. Recently, his team found that the application of lignite (brown coal) to the surface of intensive animal production pens reduced these ammonia emissions by 66 per cent, making it a cost-effective option to limit environmental impacts and improve nitrogen efficiency. Professor Chen also established the first Australian open path laser and Fourier Transform Infrared spectroscopy (FTIR) systems to measure local greenhouse gas emissions from

Professor Chen using an open path laser to measure emissions on a dairy farm in southwest Victoria

intensive agricultural activities. Research such as this has been integral in guiding product development strategies for fertiliser companies within Australia, particularly in looking at ways to increase efficiency and reduce nitrous oxide emissions. Professor Chen’s team has also developed methods for long-term measurement of methane, ammonia and nitrous oxide losses from crops and pastures in field situations. His team combined the use of quantum cascade lasers with low height and speed aircraft, which has allowed real time measurement of all greenhouse gas emissions at a regional scale. Current nitrogen research at the Faculty of Veterinary and Agricultural Sciences includes projects to reduce nitrogen loss on Australian dairy farms, measure long-term greenhouse gas emissions from beef cattle feedlots, recycle and recuse agricultural waste, measure the environmental footprint of agricultural products and manage nutrients to improve yields and profits for farmers in Myanmar and China. Through projects such as these, Professor Chen and his colleagues work with governments and partners in industry and research to develop technologies and management practices that find areas where farmers and agribusinesses can use fertiliser more efficiently to ensure long-term sustainability and profitability.

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Veterinary Science and its Contribution Australia is a world leader in veterinary science, and the contribution of the sector to vitality of the agricultural industry is not to be taken for granted.

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Disease control and the role of veterinarians in Australia From the humble beginnings of early colonial times, Australia has become a world leader in veterinary practice and the control and eradication of animal diseases. As a result of the hard work of governments and veterinary professionals over the last two centuries, Australia has an enviable reputation worldwide for healthy animals and safe and disease-free food, writes KEVIN DO YLE.

ritish settlement of Australia began with the First Fleet bringing convicts, the military, support staff and a surprising variety of animals to the colony of New South Wales in 1788. Documents indicate that the Fleet carried horses, cattle, sheep, goats, pigs, chickens, turkeys, geese, ducks, kittens, puppies, rabbits and several greyhounds owned by Governor Phillip. The long sea journey â&#x20AC;&#x201C; operating as a quarantine of sorts â&#x20AC;&#x201C; gave the colony a fortunate start in livestock health and production; however, over time common diseases like brucellosis and tuberculosis of cattle and sheep scab appeared. And thus, with the need to ensure animals in the fledgling colony remained healthy and disease-free, the history of veterinary practice in Australia began. Introduction of various diseases to Australia over the first 100 years of the colony led to the establishment of disease control and quarantine measures. As there were few veterinarians at the beginning of the colony, it was lay stock inspectors who oversaw animal health and quarantine measure. But as the colony grew, so too did the need for qualified veterinarians to deal with disease control and eradication. British graduates coming to the colony from the 1840s onwards provided early veterinary services, and this status quo was maintained until William Tyson Kendall arrived from the United Kingdom and established the first veterinary school in Melbourne in 1889. Now there are seven veterinary schools across Australia, with more than 6,700 practising veterinarians represented by the Australian Veterinary Association (AVA). Australia has been particularly successful in disease control and eradication from its early colonial times. Initial outbreaks of foot-and-mouth disease (FMD) were detected and eradicated, while sheep scab was successfully eradicated in the late 1800s. Over the years, outbreaks of classical swine fever, rinderpest, Newcastle disease affecting poultry, fowl plague, highly pathogenic avian influenza, equine influenza and more have been quickly detected and

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eradicated due to strict disease surveillance and response measures. In 1872, advice from veterinarians persuaded the Victorian government to slaughter imported cattle found to be affected with foot-and-mouth disease. Since then, freedom from FMD has been a great asset to animal productivity and has eased access to various markets for Australian meat producers. But not every incidence of disease control in the early days of Australia was dealt with as quickly. CONTAGIOUS BOVINE PLEUROPNEUMONIA When contagious bovine pleuropneumonia (CBPP) was found in five imported cattle in Melbourne in 1858, the Victorian government chose to ignore veterinary advice to slaughter them. Instead, they accepted medical advice that the slaughter was not necessary and that the imported cattle were valuable and could be saved. CBPP then spread across Australia and was not eradicated till 1970 in probably the first major nationally coordinated eradication program. Within three weeks of the discovery of the disease in 1858, one heifer was ill. Within a further three weeks, it was dead. After veterinary advice to slaughter the herd was ignored, the ill heifer infected draught oxen on a nearby farm, spreading the disease further. From these tiny beginnings, CBPP reached northern Australia in just six years and eventually infected cattle in all states except Tasmania. The disease is highly contagious and virulent, causing cattle to cough and have difficulty in breathing. It has killed thousands of cattle in Australia and around the world, and those that recover become carriers of the disease. This also causes a serious loss of production, including loss of milk. Veterinarians from the Council for Scientific and Industrial Research (CSIR, now CSIRO) were tasked to address this serious problem in 1931. Working from a base in Townsville, the CSIR scientists worked out how the organism reproduced and developed a vaccine and a reliable, reproducible diagnostic

test. These great scientific advances made control, and eventually eradication, of CBPP possible in Australia. CBPP was brought under control in NSW and Victoria, but the vast and largely unfenced northern cattle industry required new measures. Eradication began with a protected area around Alice Springs where cattle diagnosed with the infection were separated and sent south for slaughter. Healthy ones were vaccinated and allowed to join the great herds being driven to South Australia and Queensland. Separation proved so successful in eradicating CBPP that a national program was started in 1959. Infected, protected and disease-free areas were defined and cattle were moved between areas under rigid control of veterinary officers, stock inspectors and police. All cattle showing positive reactions to the diagnostic test were slaughtered, either on the spot or at abattoirs. At the same time, healthy cattle were vaccinated. The last case of the disease was detected in 1967, and in 1973 â&#x20AC;&#x201C; more than 100 years after it was introduced â&#x20AC;&#x201C; Australian freedom from CBPP was announced. BOVINE TUBERCULOSIS AND BRUCELLOSIS Following the successful eradication of CBPP, it was agreed nationally in 1965 that eradication of bovine tuberculosis and brucellosis should be commenced in order to protect human health, cattle production and export markets. It is not known how or when tuberculosis and brucellosis were introduced, but tuberculosis was first recognised in Australian cattle in 1859. This was concerning because of the risk to humans through milk consumption and par-

ticularly the high prevalence of tuberculosis in children. Initially, control and eradication of these diseases was left in the hands of the states. As early as 1886, NSW enacted the Dairies Supervision Act authorising inspection of dairies and the destruction of infected cows. However, trade concerns from major export markets (the USA and Germany) eventually gave rise to the need for a national plan to combat tuberculosis and brucellosis, and the Brucellosis and Tuberculosis Eradication Program (BTEC) was born in 1970. Jointly managed by the federal and state and territory governments (and with the industry also contributing to funding), BTEC replaced the original voluntary state control programs for both tuberculosis and brucellosis in cattle with a mandatory one. Eradication of tuberculosis was based on the testing of cattle and the consequential slaughter of disease-carrying cattle with compensation. This was accompanied by surveillance for tuberculosis in abattoirs and tracing disease-carrying cattle via compulsory tail tags (introduced in 1975) back to their property of origin to detect infected farms. In some herds, total or partial depopulation was necessary. Properties and areas were progressively declared tuberculosis free as a result of the BTEC program, culminating in national freedom from bovine tuberculosis in December 1997. Eradication of brucellosis differed from tuberculosis and relied on vaccination, laboratory testing, on-farm rapid tests and the slaughter of disease-carrying animals. Cattle herd testing was complemented by blood testing and abattoir testing and monitoring. Herd monitoring and movement controls for cattle were used to prevent

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infection of free herds, while all infected herds were quarantined and strategies implemented to minimise spread within those herds. Infected herds were tested every six months and positive cases were removed for slaughter. As a result, eradication of brucellosis in Australia was declared in 1989. Spending on the BTEC program up to 1992 totalled about $750 million. When spending by producers for mustering and infrastructure improvements is added, BTEC costs were in excess of $1 billion. Though many countries have tried to eradicate bovine tuberculosis and brucellosis, Australia is one of few countries that have had success. EQUINE INFLUENZA Australia was one of only three countries recognised as being free from equine influenza (EI) and vaccination is not employed, meaning that Australian horses are susceptible to the disease. EI is a highly contagious, rapidly spreading respiratory disease affecting horses and related species. The virus can be spread mechanically by people and objects. Vaccination, as with humans, is complicated by mutations and adaptations in the virus and therefore does not solve all problems. Disease freedom is a more cost-effective long-term strategy than inoculation. On 21 August 2007, a veterinary practitioner reported clinical signs of EI at Centennial Park in Sydney. The disease was also diagnosed at the Eastern Creek Animal Quarantine Station in four breeding stallions imported from Japan, where an EI outbreak had recently occurred. Laboratory confirmation was received on 24th August and the Australian emergency animal disease control plan known as AUSVETPLAN was activated. A 72-hour national standstill on horse movements was implemented, including lockdown of the Eastern Creek (Sydney) and Spotswood (Melbourne) quarantine stations. Within three days, horses on 50 properties across NSW and Queensland were found to be infected, and quarantine lockdowns were enforced. The outbreak was contained through prior planning, rapid response and cooperation from the industry as well as the control strategy in NSW and Queensland, all of which ultimately enabled eradication of the disease. Coop-

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eration from owners to lockdown horse movement was crucial to restricting the spread of EI to a defined area of NSW and Queensland. The outbreak peaked in September 2007, and in late September vaccination was introduced. The last new cases occurred on 22 December 2007, and as a result Australian EI freedom was declared on 30 June 2008. Estimates suggest that the EI outbreak cost more than $100 million in direct costs and $1 billion in indirect costs. NSW records indicated that more than 50,000 horses were vaccinated and 132,000 laboratory tests were carried out, with 47,000 horses affected on 5,943 properties at the height of the outbreak. SPENDING TO SAVE While the cost to recover from diseases such as CBPP, tuberculosis, brucellosis and EI may seem high, it is nothing compared to the cost the industry would incur and the damage to trade if the diseases were not dealt with so expertly and promptly. Allowed to go unchecked, any one of these diseases alone could have devastated Australian herds and racked up billions of dollars in costs. It is thanks to the expertise of our veterinary professionals and the support from state, territory and federal governments that these crises were averted and several billion dollars were saved. Australiaâ&#x20AC;&#x2122;s reputation as a clean, safe and disease-free producer of meat and other animal products continues to be bolstered and improved by such excellent work. The challenge has not disappeared: quarantine and biosecurity policies and procedures, as well as quarantine stations, continue to help prevent the entry of serious diseases. Monitoring and a rapid response address disease incidents, including those such as the newly emerging Hendra virus, which has killed over 80 horses and four people, including two veterinarians, in Australia. Despite five or more years of university education â&#x20AC;&#x201C; and in many cases further postgraduate qualifications â&#x20AC;&#x201C; veterinarians generally are among the lowest-paid professions in Australia. Most do it for the love of the work and a desire to contribute to the welfare of animals and people.

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AVA: providing veterinary leadership in agriculture and beyond

Dr Stephanie Williams, member of the Australian Veterinary Association, Equine Veterinarians Australia and Australian Cattle Veterinarians.

The Australian Veterinary Association (AVA) is the professional organisation representing veterinarians across Australia.

he AVA has 20 special interest groups and many of these play a critical role in agricultural industries. They include Australian Cattle Veterinarians, Australian Sheep Veterinarians, Equine Veterinarians Australia, Australian Veterinary Conservation Biologists, Commercial Poultry Veterinarians and Australian Alpaca Veterinarians. AVA members lead the way in strengthening Australia’s animal industries and improving farm productivity and profitability. Australian Cattle Veterinarians established two flagship accreditation schemes for diagnosing pregnancy and assessing bull breeding soundness – known as PREgCHECK™ and BULLCHECK™, respectively – that are highly valued by cattle producers. These world-first programs give producers the information they need to make profitable decisions. As well as working on farms and in practices, AVA members are involved in food safety and agricultural research, and work to maintain Australia’s position as a world leader in animal health and biosecurity. By monitoring and managing disease outbreaks, AVA members are at the coalface to minimise harm to agricultural communities and businesses. Equine Veterinarians Australia members were integral to the race to control and eradicate equine influenza in Australia. They have also been working to ensure the Hendra virus vaccine is administered to protect horses and the community from the deadly Hendra virus.

AVA members actively participate in a range of peak industry bodies such as the Cattle Council of Australia, the Sheepmeat Council of Australia, WoolProducers Australia, Animal Health Australia and the National Famers’ Federation. The AVA’s Annual Conference is attended by veterinarians from around Australia and the world looking to discover the exciting innovations that are transforming veterinary science. The AVA delivers high quality continuing education opportunities including workshops, seminars, webinars and conferences that keep members at the cutting edge of veterinary clinical practice. Since 1925, the AVA’s flagship journal, the Australian Veterinary Journal, has published the latest research and clinical studies in Australian veterinary science. The Journal features all areas of veterinary science, from the latest studies in antimicrobial resistance to the farm economic impacts of common diseases in production animals. The AVA is the voice of the Australian veterinary profession and we have advocacy and media programs in place to fulfil this critical responsibility. The AVA is driven by five strategic priorities: n Improving animal welfare – Working with stakeholders to advocate for continuous improvements in animal welfare, including a national strategy for animal welfare. n Planning an effective veterinary workforce – Based on current trends, the profession is likely to be faced with an oversupply of veterinarians overall, but an undersupply of government veterinarians. The AVA’s efforts in this area are focused on improving funding to veterinary schools, maintaining a sustainable, quality veterinary public service, ensuring that veterinary student fees are maintained at a reasonable level and working to drive demand for services. n Ensuring economic sustainability – Promoting the role of veterinarians in enhancing farm profitability and productivity, animal welfare, food security and disease surveillance are critical parts of the efforts in this area. The AVA is collaborating with Animal Health Australia on an animal health alert app to help producers connect with veterinarians about any suspected disease hazards. n Better regulation – Current priorities include advocating for the implementation of national recognition of veterinary registration across all jurisdictions. The AVA is also involved in the major reviews of veterinary legislation taking place in Queensland and WA. n Fighting antimicrobial resistance – In 2016, the AVA embarked on a project with Animal Medicines Australia to develop best-practice antibiotic prescribing guidelines for horses and the main livestock species. The AVA is also represented on the Australian Strategic and Technical Advisory Group on Antimicrobial Resistance, which will monitor the implementation plan for the National Antimicrobial Resistance Strategy 2015-2019.

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University of Sydney: leading the way in vet science Veterinary Science at the University of Sydney was recently ranked first in Australia and ninth in the world, in recognition of its leadership in animal health (QS World University Rankings by Subject 2016). Many of the nation’s leaders and luminaries in animal health established their careers at the University of Sydney and have gone on to found and lead veterinary professional disciplines, veterinary schools, animal health services and research. “Automation allows farmers to learn more about the health of their dairy cattle, and detect diseases up to two weeks earlier than usual,” explains Cameron. “Technology can assist farmers in the management of increasing herd sizes while ensuring that the health of dairy cattle is optimised. This leads to increased productivity, welfare and profitability.”

The projects profiled below represent just a snapshot of the distinctive research in the field of veterinary science at the University of Sydney. POULTRY RESEARCH Chicken is the most widely consumed form of meat protein worldwide and feed accounts for 80 per cent of its associated production costs. Research from the University of Sydney is helping to lower the cost of feed by optimising its constituent nutrients. Dr Sonia Liu first developed an interest in nutrition during her undergraduate studies at the Beijing Institute of Technology. Sonia’s research, within the Poultry Research Foundation, has demonstrated the potential to reduce the feed conversion ratio (the amount of feed required to produce 1kg of live bird) from 1.5 to 1.2, an advance which may save the Australian poultry industry approximately $300 million each year. DAIRY PRODUCTION Dr Cameron Clark is part of FutureDairy, an innovative team from the Dairy Science Group who are focusing on the use of technology to improve productivity in dairy farming. The team are helping to bring automatic milking systems to industry, and pioneering the use of novel sensors, electronic identification and ‘big data’ analysis to investigate diverse data from the herd. For example, Cameron’s research has shown that milking order is correlated to nutrition and productivity, and can be tracked via electronic collar tags and a smartphone.

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LIVESTOCK Professor Richard Whittington’s group is developing new methods for the diagnosis of diseases affecting livestock, such as Johne’s disease – a serious wasting condition caused by a bacterial infection of the intestine that can affect international market access. Professor Whittington’s use of DNA technology has reduced the diagnosis time for Johne’s disease from three months to less than one week, and a new vaccine is in the pipeline. His team is also developing modern diagnostic methods for footrot, a bacterial disease affecting sheep, particularly Merinos, and is commercialising a new vaccine. AQUACULTURE BIOSECURITY University of Sydney teams are investigating the effect of production-limiting diseases on fish and seafood. Pacific Oyster Mortality Syndrome (POMS), a virus that has killed an entire oyster population in a matter of days and caused millions of dollars of loss, was first discovered in Australia in 2010. Research by Professor Richard Whittington’s group suggests that the virus spreads when oysters eat infected plankton carried in seawater. “We have developed methods to remove plankton from the water in oyster hatcheries, preventing outbreaks in young oysters that lack resistance to the virus,” says Dr Paul Hick. In Indonesia – the world’s third largest supplier of farmed fish and seafood – grouper are a high value species of fish destined for export to China. “Up to 50 per cent of sea cage grouper die before reaching market size,” explains Dr Joy Becker. “Our team is investigating the pathogens responsible for these mortality events.” The world-leading veterinary science research at the University of Sydney is having a huge impact globally. The strength and diversity of the research has far-reaching consequences for the health of animals and humans worldwide. Research conducted in Australia and overseas, in collaboration with industrial and academic partners, is improving economic and environmental aspects of food production and biosecurity, and enhancing the health of the global population.

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Looking after animals improves profitability Animal wellbeing has moved out of the shadows over the past ten years and is now front and centre in the active debate around livestock producers’ social licence to operate.

ne company that can lay a strong claim to leading the field in improving animal wellbeing, from livestock farming to domestic pets, is Boehringer Ingelheim. This global pharmaceutical company, with its 129-year history of developing innovative medicines and services, has carved out a niche for pain management and more efficient reproductive performance in livestock animals. “Boehringer Ingelheim wants to foster the health and wellbeing of mankind by contributing to an adequate supply of safe, nutritious food and promoting the emotional and physical benefits arising from the human-animal bond,” says Australian Head of Animal Health, John Heath. The long held belief that livestock animals feel little or no pain through procedures like disbudding, mulesing, marking and tail docking or from conditions like mastitis, has been well and truly disproven through recent studies – to the extent that Boehringer Ingelheim can point to significant productivity and reproductive improvements associated with reducing pain. The company’s signature non-steroidal anti-inflammatory drug Metacam® has been prescribed by veterinarians in combination with antibiotics in a recent study in dairy cattle, which showed that conception rate to first service increased from 21 to 31 per cent. “The therapeutic efficacy and productivity benefits of Metacam® are well known, but what we didn’t expect were such significant fertility benefits,” says Dr Erick Lelouche, Head of Global Marketing at Boehringer Ingelheim Animal Health. Metacam®, with its active ingredient meloxicam, can provide long term pain relief to a number of different species including cattle, pigs, horses, sheep, dogs and cats. “Boehringer Ingelheim recognised the need to address animal pain management at an early stage,” says Heath. “We aim to partner with livestock producers to provide a comprehensive animal health solution.” The Expert Forum on Farm Animal Wellbeing, which the company has now run for nine years, is testament to its global commitment to animal wellbeing. The forum brings together animal health industry experts and veterinarians to discuss strategies for better welfare to improve animal health and farm economics. FEEDING DEMAND Australia’s signing of Free Trade Agreements in the Asian region, particularly with China, point to a future in which the nation’s agricultural products will continue to be in high demand. To address the animal productivity improvements required to meet that demand, Boehringer Ingelheim has developed Selenta® – a comprehensive

suite of hormones that improve fertility and calving rates by synchronising oestrus in cows. “When we maximise fertility synchronisation we get more calves on the ground earlier and in a shorter period of time. Calves are weaned at heavier weights and reach maturity more quickly,” says Heath. “This has benefits for marketing and herd management. “With more cows pregnant early in the mating period and tighter calving patterns, we are able to increase the rate of genetic gain and get cows back in calf sooner.” Developed in South America, the Selenta® fertility suite is also well suited to Australia’s northern beef herds where it has been shown to improve reproductive performance, particularly with cattle in leaner condition. The Selenta® program offers specific protocols for the Bos Indicus and Bos Taurus breeds and different approaches to meet the needs of heifers and mature cows. “Our planned breeding programs maximise livestock production and profitability,” says Heath. “They are important tools to optimise the performance of the herd.” In the agricultural sector, Boehringer Ingelheim has recognised a need to develop products and strategies for veterinarians and livestock producers that reduce the stress and pain imposed by the management of livestock, and ultimately improve livestock wellbeing. The company’s cutting-edge technology is making a difference to the productivity, reproductivity and health of both animals and people.

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11/VETERINARY SCIENCE AND ITS CONTRIBUTIONS

Veterinary Sciences at James Cook University As a comprehensive university located within the tropics, James Cook University (JCU) is unique among developed nations, as its location provides access to a broad range of livestock systems, marine resources and modern technologies. As such, it has a focus on not only the needs of tropical and regional Australia, but also surrounding regions such as Southeast Asia and the Pacific.

he School of Veterinary Sciences (VS) at JCU is still young, having first accepted students into its five-year Bachelor of Veterinary Science program in 2006. In accord with the JCU focus, the student selection process places an emphasis on candidates who come from rural, regional and remote areas. This focus is intended to increase the number of veterinary graduates working in rural and regional Australia, areas which often struggle to attract accredited veterinarians. The program – which is fully accredited within Australasia, the UK and South Africa – has achieved high rankings in terms of student experiences and outcomes. In addition, graduating classes to date (of approximately 50-60 students) have largely fulfilled the program’s original vision by being engaged in veterinary practice in non-metropolitan areas. With the dominant livestock industry in northern Australia being beef cattle, the predecessor of VS – the Graduate School of Tropical Veterinary Science – rapidly asserted itself as a valued resource for the Northern Beef Industry. Early staff appointments were made in animal health and animal production disciplines such as nutrition, reproduction, livestock production and management, animal breeding and genetics and statistics. Comprehensive large animal handling facilities were established both at the main JCU campus and at ‘Fletcherview’, a 1900ha property west of Charters Towers that was purchased in May 1978 to serve as a focus for relevant beef cattle teaching and research. Strong, ongoing and collaborative linkages were established with both relevant state and federal entities as well as with livestock producers in North Queensland. Today, the need for the JCU Veterinary Program to be closely identified with the Northern Beef Industry and its needs is greater than ever, with drought, market vagaries and biosecurity issues all threatening industry viability. Recent projects, as listed below, reflect this commitment: n Improving beef cattle production in the tropics n Investigating the epidemiology of diseases of animals in the tropics n Improving meat eating quality of tropical beef cattle n Reducing carbon emissions from tropical beef herds n Selecting legumes to enhance beef production within tropical pasture based grazing systems n Improving fertility to artificial breeding in beef and dairy cattle within the tropics n Developing alternative techniques for non-surgical sterilisation of male and female cattle

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n Ecology and management of parasites in tropical livestock n Evaluation of algae used for waterway clean-up as stock feed n Novel, low-cost sentinel systems for insect-borne viruses n Evaluation of wildlife effects on available biomass

Apart from these activities with cattle, the program has a number of other resources and activities that have relevance to its location and mission. These include a modern small animal veterinary hospital and state-of-art pathology and diagnostic capabilities. JCU students gain experience with dairy cattle and horses through off-site core student rotations that provide necessary veterinary skills and instruction. The development of veterinary programs in wildlife and aquaculture is gaining momentum, as are international agreements to share veterinary students, staff and research projects. In addition, JCU has strengths in several areas which complement and augment the veterinary program, including medicine, biomedical sciences, marine science and tropical environments. This wide-ranging strength in veterinary science and related fields allows JCU to train and educate some of the most skilled veterinarians in the country. Coupled with a research base that is aided by the university’s unique location, it is easy to see JCU as a significant contributor to Australia’s excellence in veterinary science.

Company Website

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Proven and Premium Brands of Australia Some of the outstanding food, beverage and healthcare brands in Australia and the products they make.

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12/PROVEN AND PREMIUM BRANDS OF AUSTRALIA

Speaking with one Australian voice: the great brand debate When it comes to branding, Australia should speak with one voice – or a single brand – in its overseas food marketing. But getting there demands more clarity and continuous leadership.

n 2014 the great Aussie brand debate kicked off. Since then it has flared, sizzled, gone quiet and reappeared – there’s been sporadic good work and not a little dissent. In our humble opinion, two elements of the discussion need more focus: a definition of terms and an appreciation of the full process needed to achieve a national brand. This is not an easy task. Let’s look at some recent history. A controversy ignited when a new brand name was suggested for a large number of Australian food exports. The suggestion was to use a well-tested brand, “True Aussie” – an upgrade of “Aussie Beef”, a very successful red meat brand used in Japan for years by Meat and Livestock Australia. A great deal of effort and a fair sized budget was spent in testing “True Aussie”. For various reasons, it was roundly rejected by food producers outside of the red meat industry. Some said that it did not translate well into Chinese, suggesting that it was too vague – “True Aussie what?” some said, “that could mean an Akubra hat”. Some felt it did not represent their industry as they would like. This episode illustrates the sheer difficulty in the use of words and translation of meaning into multiple languages, not to mention the disparate state of the Australian food industry. This is a prime example of how a brand – with background effort and clear and concise communication of information – can work superbly in a specific market, as “Aussie Beef” did in Japan, and yet be seen as unworkable as an all-encompassing label. What is often forgotten is the supportive work done to push meaning into a brand such as “Aussie Beef” over many years. A single phrase doesn’t just work magic in a foreign market without a lot of behind-the-scenes effort. Ask Richard Norton, CEO of Meat and Livestock Australia – his organisation has been devoted to establishing beef and lamb provenance for over 30 years overseas. The fine results are apparent. At the 2014 National Farmers’ Federation (NFF) annual conference, the question of unity poked into the proceedings. Many of the speakers looked tremulously over their shoulders at New Zealand. “Proof,” they said, “that a country could brand itself well with a single theme.” The New Zealand theme “100% Pure” has been successful since 1999. It

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was a fortuitous lift from NZ Tourism, which originated it, and was happily adopted by the food industry. Admittedly, the words are perfect. Why? Because they are simple, direct, utterly positive, suitable for any kind of product and they also translate well. In Australia our fractured debate confuses the difference between a brand, a theme and a slogan. “100% Pure” is a theme. Some might call it – fairly – a national brand. We use the word theme to describe what others call a national brand. We are being practical, not pedantic, to suggest that the national brand be called a theme. The word is more inviting to users and is less threatening – brands are jealously guarded intellectual property. A theme which uplifts all brands and the country, like “100% Pure”, is what we need. It’s all about the words, and the perceived purpose. A true theme rides above brands, reinforces a universal thought, helps all and offends none. Words and perception are important in business. During our wide travels preparing Boundless Plains to Share, we found many organisations and market sectors fearful of misrepresentation or being eclipsed by a national brand – especially one tied to another sector. We strongly suspect the word “brand” alone caused some resistance. In 2015 another highly-regarded group led by a knowledgeable figure agreed to create an over-arching brand for Australian food. What emerged (and was little-seen outside the industry) seemed a kind of final draft for a series of TV ads: fairly polished and with visuals, it was a long story in sections. It was television-centric and lacked the power and immediacy of a single strong statement usable in all contexts. The theme or punchline was “That’s Australia for You”. Many felt this phrase too vague, and our own Chinese language tests revealed this to be a problem. Some respondents even cited negative connotations from the phrase. Then someone pushed another view – that the Australian Made brand be replaced or modified. Interestingly, this is by far the closest thing to a true national brand we possess. But not all agree, with some opposed to the kangaroo logo. Our studies with bi-lingual Chinese nationals show in fact that in the past three years, a high percentage of the 35-and-under age group in urbanised

China now refer routinely to Australia as “Kangaroo country.” These are the characters: 袋鼠国. And yet no one stopped to ask what the millions of consumers thought about the kangaroo or the Australian Made logo, apparently. This is the buying audience of that theme, or national brand, after all: those for whom “Australian Made” has acquired expansive meaning. This relates to our second opening point: national branding is a big task. And at the moment it is one with little or no process, no deep program of market research on an industry-wide or international scale.

lar huge Twitter successes in Australia, and designed a new marketing page for brands which tested brilliantly. That, we believe, is provenance building which aids all Australian brands. In the following pages we display a variety of Australian brands – some of them big and great, some of them new innovative aspirants. The point is simple: any new national brand (theme) need satisfy them all, and many more. It must be all encompassing, as Australian Made in its simplicity seems to have accomplished. The market study process mentioned above should begin with Australian Made, shouldn’t it?

STORYTELLING AND PROVENANCE Boundless Plains to Share is not a brand and never intended to be one. It is what we call a “knowledge campaign”, designed to support Australian agriculture through targeted quality information delivery. Boundless Plains to Share is devoted to telling the stories of our history, climate, biosecurity and superior methods, and the science, efficiency and innovation on which Australian food products are based. It aims to be the ballast for any brand or company, and, as a whole, Australia. The purpose is to strengthen our total agricultural provenance, and increase our competitive edge over other countries. We use the word “provenance” in an expanded sense to include education, science, finance, logistics, transport, and other pillar industries within agribusiness. Fortunately, Australia excels in all of these. But are we projecting this? As Mick Keogh, Executive Director of the Australian Farm Institute, has rightly said: “We need to improve our story telling. We have so many compelling and dynamic ones – and we haven’t been good at telling them as often as we should.” Our contact with food authorities, agricultural professors, buyers and editors in Australia, Asia and China underlines this. They are delighted with and hungry for our material. Some have offered to assist in translation and distribution. A Chinese professor with over 650,000 Weibo adherents (the equivalent of Twitter followers) recently shared an eight-page article from Boundless Plains to Share with significant re-tweet and reading results. We’ve achieved simi-

LEADERSHIP While individual organisations often do an excellent job in their immediate fields, there is no nationally cohesive effort to consistently support, from multiple points of view, our agriculture and food provenance. Is it actually the job of one sectoral organisation to do this? Probably not. What is needed is a group or an organisation totally devoted to the task. Andrew “Twiggy” Forrest recently re-emerged with a push on his ASA 100 initiative and a renewed appeal for brand unity. Though he is linked to beef, he sees the bigger picture. ASA is a fascinating candidate for leadership because it is already based on both a theme and diplomacy. Apparently Trade Minister Steve Ciobo and Austrade may come aboard on this initiative – good, in our opinion. Austrade leaders across Asia and in China are uniformly, from our experience, devoted and expert. The missing link in the national theme chain today is the words or the simple phrase. To spur thought, we humbly offer a starting point: “Pure perfection from the Great Island Continent” (来自澳大利亚的纯粹完美). While some may find this too close to the New Zealand example, keep in mind that New Zealand does not own the word “Pure”. Another possibility is “Absolute Perfection” (极致完美). All the elements of the national brand quest can be resolved, but only if we communicate well and find a truly inclusive theme based on serious market research. Then we need to tell our great stories and leverage digital and social media and other means to capitalise on the opportunities at our feet. Fortunately we have an eager, interested audience. Carpe Diem!

Kangaroo country. 袋鼠国 Pure perfection from the Great Island Continent. 来自澳大利亚的纯粹完美 Absolute Perfection. 极致完美 -315-

Leading Australian Brands

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PRESHAFRUIT shakes up the juice game

When Alastair McLachlan went into the juice business he had a striking ambition: to create the world’s best tasting apple juice. This needed innovative technology, which he found with the HPP cold pasteurisation process. After many technical trials and taste tests with consumers, the unique Preshafruit juice was born. It has set new standards for purity of taste, nutrition and health and found new ways of achieving them. That is the basis of the Preshafruit brand and the reason behind its impressive market growth in Australia and internationally. Preshafruit is the trading name of Preshafood, the company behind Australia’s premium cold pressure pasteurised juices. Preshafruit juices are pasteurised using HPP (high pressure process – see page 198), which leaves the juice’s flavour intact. The difference between Preshafruit juices and those prepared with conventional heat-based pasteurisation techniques is stark. Preshafruit juices retain that just squeezed freshness, while juices that have undergone the heating process are darker coloured and have a more lifeless flavour. Many contain preservatives and additives in an attempt to restore some of the flavour lost in heat pasteurisation. The HPP technique pressurises the juice to the extent that foodborne pathogens and other organisms causing spoilage cannot survive, while all the vitamins and goodness are retained. It totally eliminates

thermal degradation, giving Preshafruit juice a fresher taste and a higher nutritional content. The only way you’ll get a fresher taste is to get up a ladder, pick your own fruit off the tree, stuff it in a bottle and drink it that same day.

The Brand: The prefix ‘Presha’ is a clever amalgam of ‘pressure’ and ‘fresh’, which are characteristics of the process and the product respectively. The Preshafruit logo, of a leaf and a stylised snowflake crystal made out of arrows, similarly conveys the lack of heat in the pasteurisation process and the fact that it is applied to just-grown fruit. The simple packaging and plain text on the Preshafruit bottles further conveys the basic simplicity of the product – nothing is added and nothing is altered.

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Serendipity is not just lucky Serendipity’s products are all made using artisanal techniques and are produced in small batches rather than on a big production line. “We start from scratch with the real ingredients,” explains Sarah. “For instance, we make our own strawberry jam for our Serendipity Strawberry Jam ice cream. We start with strawberries, sugar and lemon juice to make the jam and then add that to fresh milk and cream.” Serendipity is also famous for offering a range of unique flavours such as durian, green tea, taro and ginger. “I have travelled extensively throughout Southeast Asia, so I’m familiar with a broad range of flavours that aren’t necessarily available in Australia,” says Sarah. “Given Australia’s multicultural population, I figured it was the right time for somebody to introduce these new flavours to the marketplace.” One of these new flavours has since become their most-awarded and best-selling product: Serendipity Black Sesame ice cream. Inspired by the Chinese market, it is made from fresh milk and cream locally sourced from New South Wales, sugar from northern Queensland and freshly roasted, finely ground black sesame seeds imported from China. Serendipity’s other best-selling product is their mango sorbet. Combining artisanal techniques, with fresh Kensington Pride mangoes, lemon juice and sugar locally sourced from northern Queensland, it is dairy-free and fat-free. In its fifty-year history, Serendipity has been one of the most awarded ice cream brands in Australia. The company has won numerous state and national awards, including trophies and gold medals from the 2016 Sydney and Queensland Royal Dairy Competitions. Serendipity’s ice creams and sorbet are sold in 130ml and 500ml sizes across Australia in independent supermarkets, organic food stores and cinemas. They are also available in China via online shopping portal www.sfbest.com.

erendipity Ice Cream is an award-winning Australian producer of premium ice creams and sorbets. The family ice cream business was passed from mother to daughter thirty years ago when Sarah Mandelson took over from her mother Alix. Since its humble beginnings, it has grown into an internationally recognised brand, beloved for its unique flavours and artisanal production. Serendipity was formed in 1966 by Alix Mandelson, an American diplomat living in Australia who was missing the taste of home. Being allergic to chocolate and frustrated by the fact the most exotic ice cream she could find in Australia was Neapolitan, Alix began making her own ice cream using fresh ingredients in her small home kitchen in Sydney. The company is now managed by Alix’s daughter, Sarah, who has taken the family brand international, not only selling Serendipity Ice Cream across Australia but also introducing the brand into the Chinese market. “I have always loved making food. So when my mum said she was going to sell the business, taking over the family brand seemed like the obvious thing to do,” says Sarah. Sarah’s background in science propelled the development of Serendipity’s ice cream production. “I would describe what we do as part science and part art,” says Sarah.

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The Brand: Serendipity is an award-winning Australian brand dedicated to making premium, allnatural ice creams and sorbets. Using high-quality, ethically-sourced ingredients and carefully crafted recipes, Serendipity’s ice creams are a standout in the marketplace. Their oval shaped logo, coloured chocolate, cream and pink, is a sign of quality recognised in Australia and abroad.

Bite-size crackers feed A BIG MARKET

After years as a skilled chef working in hospitality, entrepreneur Sam Tucker saw a niche opportunity in 2007 and transformed his family’s bakery business into a wholesome natural cracker producer. Using only highquality Australian ingredients, Tucker’s Natural has now expanded into the international arena. Tucker’s Natural is a South Australian family-owned business making a range of premium handmade savoury crackers, sweet biscuits, healthy snacks, fruit pastes and dressings. Their standard of manufacturing is based on a firm principle – to use and buy first-grade, sustainable ingredients from as many Australian providers as possible. According to Managing Director Sam Tucker, supporting Australian businesses underpins the company’s operations. “Upwards of 95 per cent of our ingredients are Australian – we source everything as close to home as we can,” says Sam. “If we can’t find a South Australian supplier we look interstate and if we can’t find one interstate we buy from an Australian importer.” The Tucker’s Natural approach is to engage people who share their business philosophy – procuring home-grown products is fundamental. “It’s about ensuring our local food industry remains vibrant and competitive,” says Sam. “As an Australian business, we’re committed to supporting other Australian-owned companies and

forming long term partnerships that deliver value to our customers.” In line with their conviction that excellent ingredients produce the best tasting products, Tucker’s Natural carefully selects high-quality, nutritionally superior ingredients. Sam has personal connections with a wide range of producers and many trusted relationships with his suppliers. Nine years on, the focus on quality Australian ingredients has attracted a large number of prestigious industry awards for Tucker’s Natural and impressive market growth in Asia. As a result of this growth, two of their products – Strawberry Fruit Bites and Blueberry Fruit Bites – were finalists in the 2016 SIAL Innovation Awards in China, Asia’s largest food innovation exhibition. The company’s steady growth in China is evidence of the emergence of a more discerning consumer in Asia. Tucker’s Natural gourmet style foods are attracting buyers who want first-class food products that are both healthy and appetising. “We’re not mass produced – all our crackers still benefit from authentic handmade processes,” says Marketing Manager Catherine Evans. “All of our products are made without preservatives, artificial colours, flavours or genetically modified ingredients, and are yeast, soy and MSG free.” The crackers are produced to the highest quality standards and controls, processed by hand to give a unique, artisanal variation to every batch. Despite the time and labour demands of hand processing, Tucker’s is able to make its premium products in commercial volumes in order to supply the national and international markets. Stemming from Sam Tucker’s original idea to fill a niche in the market and create a range of authentic gourmet crackers, the company’s multi-award winning delicious products are now enjoyed by customers all over the world.

The Brand: The simple yet sophisticated and distinct Tucker’s Natural logo represents the purity of their ingredients, selected for optimal health and nutritional benefits. The wheat grain symbol indicates a commitment to producing unique, premium, natural, authentic foods that excel in taste, texture and flavour and are considered the very best in their product class.

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BREAKOUT RIVER: providing

The Breakout River Meats philosophy is simple: To provide customers with the best quality meat for 52 weeks a year. It is an aim that is made possible by combining the rich agricultural pastures around Cowra with the company’s expertise in livestock buying and unique product processing. Breakout River’s three brands – Cowra Lamb, Watervale Beef and Chiverton Pork – provide the best meat possible and are only available at your local butcher or independent supermarket. Breakout River Meats was started in 2006 by Chris Cummins, a Cowra local with a long history in livestock buying. The company began with only six staff, but in just ten years they have greatly expanded their operations and now employ over 200 people. This growth is even more impressive when you factor in Chris’ decision not to sell his meat to supermarket giants Coles or Woolworths. “I spent over 25 years in the livestock industry as a buyer, and in 2005 I decided that I should be doing something more,” says Chris. “I saw an opportunity to only deal in quality and deal with the top-end butchers, and that’s what we’ve done. Breakout River didn’t start big – it started small and we’ve built our way up.” One of the key reasons for the superior quality of Breakout River’s meat is the excellent conditions for agriculture in Cowra and its surrounds in Central West NSW. With reasonably steady rainfall, it is an area that lends itself to producing quality meat. In the case of Cowra Lamb, it is a combination of the region’s healthy soils and regular water supply via the Lachlan River that produces grazing land the envy of the rest of Australia. The region has a reputation for producing the best lambs in Australia, with breeding genetics that are reliably first-rate. The lambs processed under the Cowra Lamb brand are

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predominantly sired by Poll Dorsets, a breed renowned for their superior taste and relatively high yields of meat. What this means for the consumer is a higher proportion of quality cuts of lamb and a tenderness that isn’t matched by many competitors. For producer Brett Johnstone – who farms at ‘Malmo’ Woodstock, near Cowra – supplying to Breakout River meant changing the way he grew his lambs. After a conversation with Breakout River’s staff, Brett altered his breeding to focus on lambs that produced bigger chops without any excess fat. The end result is a very high-quality cut of meat. “Quality is what I pride myself on, and I think that works in with Breakout River,” said Brett. “They buy the highest quality lambs in order to put quality meat into butcher shops and service the demands of quality-seeking customers.” The conditions that make the Cowra Lamb brand so consistently excellent also extend to the Watervale Beef brand. These conditions result in some of the best cattle in the country producing some of the most consistently tasty beef available. In addition to these excellent conditions and Breakout River’s strong relationships with local beef producers, only the finest beef is selected for the Watervale Beef brand thanks to quality feeding and a unique hand-selection process. With a livestock buying team boasting several decades of industry experience, it is the attention to detail in the selection process that makes all the difference. Selecting cattle on an individual basis (and under such experienced and watchful eyes) guarantees that only the best, tastiest cuts of beef make it to your plate. Breakout River’s pork brand – Chiverton Pork – also excels in taste thanks to the excellent farming conditions around Cowra. In addition, Chiverton Pork pigs are hormone free, and – due to Australia’s strict quarantine laws and quality assurance programs – produce some of the cleanest pork in the world.

the best for your local butcher

The focus on quality from the seasoned local pig producers of Central West NSW means Chiverton Pork is flavoursome, juicy and in high demand. The bacon from these pigs tastes far superior to the predominantly foreign-made bacon available in Australian supermarket chains – just one more reason to shop local and buy from your local butcher or independent retailer! The decision not to sell to Coles and Woolworths means that Cowra Lamb, Watervale Beef and Chiverton Pork can only be bought at independent supermarkets and local butchers. A passionate believer in the strength of rural communities and the independent retailers that make up these communities, Chris was driven to his decision by his first-hand experience of the damage done to Cowra retailers by the supermarket giants. Breakout River has a symbiotic relationship with the town of Cowra (see page 139), and Chris is striving to support the town (as well as independent retailers across Australia) in any way he can. “We’re trying to make people aware that your local butcher has got good meat that you can’t buy in supermarkets,” says Chris. “We’re helping our butchers to survive in a really tough environment against Coles and Woolworths.” Part of the Breakout River advantage is the superior quality meat and its availability year round. The company’s unique chilling process means that their meats have a longer shelf life than most other processers, and their loyalty to their local suppliers ensures the quality of the meat they process. “Our product is not only superior, but also very consistent for all 52 weeks of the year – the big supermarkets produce so much volume that their quality is inconsistent,” says Chris. “At Breakout River, our culture is that we will not deviate on quality or price: we don’t try to do a lesser quality product because you can buy that cheaper, we try to do the best quality possible.”

Cowra Lamb, Watervale Beef and Chiverton Pork gain their superior taste and quality over their competitors from not only the favourable conditions they are produced in, but also from the efforts of Chris Cummins and the staff at Breakout River. It is their drive towards excellence, attention to detail and support for the local butcher that makes Breakout River a class above when it comes to meat.

The Brand: The name Breakout River comes from a combination of the famous Cowra Breakout (a mass escape of Japanese prisoners of war from a Cowra camp during World War Two) and the Lachlan River which runs through the town. The company’s brand names – Cowra Lamb, Watervale Beef and Chiverton Pork – are all named after farms or towns in the region. The company logo is drawn from an iconic photo of two horses racing down the Lachlan River near Cowra.

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Turning the non-dairy market INSIDE OUT

Combining their passion for healthy living with an embrace of innovative technology, childhood best friends Vuong Nguyen, Anthony Tuong and Ed Arthy launched their own non-dairy milk company: Inside Out Nutritious Goods. Quickly gaining a reputation for producing some of the freshest – and healthiest – almond milk on the market, Inside Out have also introduced coconut milk and soy milk to their range. With a background in nutrition and dietetics, and a determination to keep ingredients to a minimum, Anthony, Ed and Vuong use innovative high pressure processing (HPP) technology to manufacture their milk. HPP applies an even amount of pressure to the bottles – equal to six times the deepest parts of the ocean – in order to kill harmful pathogens and bacteria. “We are the first people in Australia to have commercialised nondairy milk using HPP technology,” says Anthony. HPP pressurisation guarantees freshness, flavour and texture, allowing the milk to be kept to the bare essentials. It is far superior to ultra-high temperature (UHT) processing, in which exposure to heat results in nutritional properties being lost or damaged. HPP not only preserves important vitamins, minerals, enzymes and protein, but the cold pressing technology also gives the milk a unique quality which makes it froth beautifully in coffee.

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Each bottle contains only four or five necessary ingredients with no artificial flavours, colours or preservatives. And they take careful care in selecting these important ingredients, sourcing only the best almonds available. Their almonds are grown in South Australia, in direct comparison to many other brands that derive their milk from almond paste. Inside Out almond milk contains 14 per cent almonds, which is three to six times more than UHT brands. The almonds are processed in small batches and then soaked before production to ‘activate’ them, allowing the full nutritional goodness of the almonds – vitamin E, calcium, vitamin B, fibre, essential minerals, enzymes and protein – to be savoured. “Our almond milk ticks all the boxes for someone who is no longer able to drink dairy milk,” says Vuong. Dairy, gluten, lactose and refined-sugar free, all of their non-dairy milk products come with a month’s shelf-life and are Safe Quality Food (SQF) approved – a stringent export-ready food safety standard. Available as unsweetened or original – and in four different flavours – Inside Out almond milks are also non-GMO, vegan and paleo friendly. “We do not compromise on quality,” says Ed. “We retain the natural taste of almonds with a full-bodied consistency normally found in milk.” Proudly stocking their products in over 800 premium grocers and health food stores Australia wide (including CostCo), Inside Out is also regularly available in cafes and restaurants. From modest beginnings, three dynamic friends with a clever idea to make wholesome and healthy almond milk are now at the brink of selling their product globally. The success of Inside Out is a testament not only to the quality of their almond milk, but to their drive and embrace of innovative technology.

The Brand: Inside Out is a premium, fresh, non-dairy milk producer. Their philosophy is to manufacture a wholesome product which is good for you both inside and out. Their circular, black and white, flowing logo reflects their core values: to use natural products that provide a healthy balance and nutritional benefit to consumers.

Maggie Beer’s sparkling touch

As one of Australia’s culinary icons, Maggie Beer has a long history of offering gourmet foods made from fresh produce and high-quality ingredients. Her range of non-alcoholic sparkling drinks is no different. Started over 20 years ago by Maggie and her husband Colin, Maggie Beer Products draws on Maggie’s history in the food industry as a farmer, cook and restaurateur (see page 138 for more information) to provide a range of gourmet products for both the Australian and international markets. Inspired by the abundance of fresh produce in South Australia’s Barossa Valley, Maggie’s cooking philosophy has always been to use the best seasonal ingredients to create niche food products, such as her pastes, Verjuice and famous Pheasant Farm Pate. Expanding her line of products, Maggie created a range of non-alcoholic sparkling drinks including Sparkling Ruby Cabernet and Sparkling Chardonnay. The Sparkling Ruby Cabernet is a carbonated Ruby Cabernet grape juice, made from early harvest grapes farmed in southeast Australia. Not as sour as a Verjuice, it is fruity and tart with the bead of champagne and the mouth feel of a good wine. It has notes of rose petals and crushed strawberries on the nose with green tea characters and a hint of citrus and sour cherry flavours. With a crisp and dry finish, it is the perfect accompaniment to dishes featuring game, kangaroo, duck or goose meat. “I drink Verjuice over ice to keep me cool and refreshed. Now that was too sour for most but it started my search. This wonderfully refreshing Sparkling Ruby Cabernet is the result,” says Maggie. “The tea characteristic lends me to think of Pinot, and there is the nose of crushed strawberries but also a hint of strawberry on the palate.” The Sparkling Chardonnay (also made from early harvest grapes) on the other hand, has aromas of passionfruit and sweet mango. It has

ripe papaya and guava flavours on the palate and finishes with a crisp, dry note of fresh lime. Like any other bottle of Chardonnay, it is ideal with freshly shucked oysters, white fish or soft cheese. Alternatively, it can also be mixed with mineral water to make a refreshing sparkling Chardonnay spritzer. Maggie recommends serving it icy cold in a champagne flute. Benefiting from Maggie’s decades of experience in the food industry and her genuine love of food, the range of non-alcoholic sparkling drinks is a winning addition to her impressive range of gourmet food products. Made from the highest-quality ingredients Australia has to offer, these drinks are sure to be a big hit in kitchens, cellars and picnic hampers around the world.

The Brand: The pheasant logo harks back to Maggie and Colin’s initial foray into the food industry as pheasant breeders, also recognising the name of their original restaurant: The Pheasant Farm. The quirky style of the logo – drawn like a rubber stamp with bold lines – reflects Maggie’s unique personality combined with the high-quality of her company’s products.

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JEEERKS: revolutionising beef jerky “simply the way beef jerky should be,” explains Pip. “Most beef jerkies are leathery or processed; JEEERKS is all natural, gluten-free premium beef jerky.” JEEERKS comes in hard or soft variations to suit individual palates and is available in original, chilli and BBQ flavours. All JEEERKS products are high in protein, low in carbohydrates and gluten-free, made with a classic blend of herbs and spices that give it a rich, fullbodied, classic flavour. With a delicious product in hand, Pip set out to demystify a common assumption about beef jerky’s nutritional value. She has been educating consumers about its high protein, low fat and low carbohydrate content, letting people know that as a snack – unlike a bag of chips or lollies – jerky is actually good for you. JEEERKS’ handy packaging and affordability attracts a wide range of buyers, from people conscious about their weight, health and fitness looking for a high-protein snack, to people on the go and to parents searching for the perfect snack for their children. “As we like to say, it’s packed with protein for the gym JEEERKS, low in carbs for the lady JEEERKS and full of flavour for the pub JEEERKS,” says Pip. “It is also very popular with the younger generation – children just love it, and it is proving to be a better choice over other lunch box items that are high in sugar and saturated fats.” Besides being a natural and healthy snack, jerky also works as a versatile companion to many meals, including salads, pizzas, soups and omelettes to name a few. Its adaptability has recently attracted the attention of Australian Gourmet Kitchen, which is developing cooking videos focusing on cooking with the JEEERKS product range. JEEERKS beef jerky is currently distributed nationally and is also available via their online store.

Frustrated with the quality of beef jerky available, a young human resources manager from Kirra in Queensland took a bold step: making her own tasty, traditional and nutritional beef jerky. Two years on, clever enterprising and hard work has put JEEERKS on the path to becoming the leading beef jerky in the country. Ordinarily, the consumption of beef jerky has been associated with the unhealthy activity of beer drinking. So when Pip Clark saw a gap in the market for quality beef jerky, her background in fitness and health fuelled her passion to produce old-school, tasty beef jerky and educate consumers about its health benefits. Determined to outdo the heavily processed, flavourless jerky already available in stores, Pip went back to basics to make traditional beef jerky. Sourcing 100 per cent premium Australian beef, she trialled and tested recipes until she found the right balance between taste, texture and flavour. The result was JEEERKS: a tasty and nutritional jerky that has quickly found popularity among Australian consumers. Manufactured within a HACCP accredited facility in Brisbane from lean cuts of topside Australian beef stripped of all fat, JEEERKS is

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The Brand: The distinct and quirky JEEERKS branding appeals to a wide range of demographics and is adaptable to almost any consumer market. The cartoony brown cow represents the product’s source in a fun, unconventional way and – combined with the lush, lime green font – JEEERKS’ packaging concept represents a clean, fresh, premium quality product.

Award-winning Byron

Bay Chilli Co. keeps soaring

When John Boland moved from California to Australia in 1992, he bought a patch of land overlooking Byron Bay. He took a gamble, a five kilo bag of chilli seeds and a clever idea and grew some jalapeno chillies. Twenty years on, his burgeoning crop is now producing a world famous range of salsas, chilli sauces and corn chips trading as the Byron Bay Chilli Company. On their arrival in Australia, John and his wife Lynne found that jalapeno chillies thrived in Byron Bay’s rich, red soil and perfect semitropical temperatures. They experimented with the tastes and flavours of Mexican food, tastes that were familiar to them but unheard of in Australia twenty years ago. Using their fresh chillies, they made a salsa to accompany the burritos, tacos and nachos they sold from their Mexican food stall at the Byron markets. Their salsa recipe was a huge hit with the Byron locals, with customers requesting bottles of the salsa to take home with them. The salsa John offered was an alternative to the salty, sugary, watery salsas already on the market, made using fresh spices, coriander, cumin and onions. Soon their salsas, under the name of Byron Bay Chilli Company (BBCC), were being sold in delicatessens and the department store chain David Jones. Within a year, they were stocked and sold in Coles supermarkets across Queensland.

BBCC soon added sauces to their range, using natural ingredients inspired by Thai, Indian and Mexican cuisines to produce sauces with a fuller, more robust texture. “Our sauces are representative in a small way of what has happened in Australian cuisine over the past twenty years, which is a fusion of so many cultures from different foods around the world,” says John. “Our guiding principle is one of responsibility, and to give back to the community with good quality food at a good price.” BBCC have combined distinct flavours from a range of countries in their own unique way to produce six original recipes that suit both an Australian and international palate: Fiery Coconut Chilli Sauce with Curry and Ginger, Spicy Lemongrass Chilli Sauce with Coriander, Smokin’ Mango Chilli Sauce with Chipotle Chillies, Heavenly Habanero with Mango, Green Jalapeno with Coriander and Red Cayenne with Lime. A string of awards have followed for BBCC, the most notable being in 2007 when their Fiery Coconut Chilli Sauce was voted Grand Prize Winner at the annual Scovie contest in Albuquerque, New Mexico. It was an extraordinary win which created opportunities to export to American stores and online shopping sites. Following well-received demonstrations at food shows in London and Dubai, BBCC has not only secured a licencing agreement to manufacture in the UK, but their Fiery Coconut Chilli Sauce has also proved to be a big hit in the Middle East. The company is now also branching out to South Asia for regional manufacturing and is on the lookout for more opportunities to expand their business. Starting out from nothing, BBCC now has products in 2000 stores and supermarkets throughout Australia. From salsas to sauces and even their new corn chips (made without palm oil or GM corn), Byron Bay Chilli Company products are hot on everyone’s lips.

The Brand: The lighthouse represents the company’s Byron Bay origins, surrounded by a natural paradise. The cartoonish font plays with primary colours and echoes the branding used in Mexico on beer bottles. It represents crisp, clean flavours and quality ingredients that burst on your taste buds.

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Looking after yourself at the twist of a cap

A shared interest in a healthy lifestyle saw Emma Welsh and Tom Griffith establish a health food business, Emma & Tom’s, in 2004. Their creativity and dedication to providing natural, sugar-free food products have made them one of the most successful brands on the market. A love of swimming brought childhood friends Emma Welsh and Tom Griffith together when they were 12 years old. Decades later, they remain not only good friends but also business partners in a successful, international healthy drinks and snacks company – Emma & Tom’s. The brand’s signature product is their range of fresh, whole fruit super premium smoothies made without artificial colours, flavours, preservatives or concentrates. Flash pasteurised and cold filled, the natural flavour and nutrients of the fruits are retained – with each bottle providing up to 15 per cent of the recommended daily dietary fibre intake and two portions of whole fruit. Combined with functional botanicals such as spirulina, ginseng, kelp and chlorella, Emma & Tom’s products are more than just ordinary fruit smoothies. “We have built our business by working closely with our producers, offering customers a great service and delivering a product that we are very proud of,” says Tom. Emma & Tom’s recently added a range of sugar-free flavoured milk to their extensive range, which includes sparkling fruit juice, brewed iced teas and dried fruit and raw nut Life Bars. Currently available in four different flavours – chocolate, strawberry, espresso and salted caramel – the product is the first of its kind to hit the Australian market. “Flavoured milk hasn’t really changed in Australia since the 1970s,

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and it’s traditionally loaded with sugar,” says Tom. “Our whole ethos is to provide food that is natural, minimally processed and with no added sugar – and we want to do that with flavoured milk, especially since Emma and I both have young children.” Using milk sourced from Victoria’s dairy-rich Gippsland region, the sugar-free flavoured milk is made with stevia – derived from the naturally sweet-tasting leaves of an indigenous South American plant – instead of sugar. “Stevia has zero calories and is about 400 times stronger than sugar, so we only use a very small amount of dried stevia extract in our drinks,” explains Tom. Proud supporters of Australian farmers, Emma & Tom’s source their products locally, using Kingston Pride mangoes from North Queensland, stonefruit from South Australia and chia seeds from Kununurra in Western Australia. “We only buy produce from overseas when a fruit or vegetable is not commercially grown in Australia. We are very focused on provenance and conscious of issues like not adding food miles,” says Tom. “Our company is 12 years old and we have 50 full-time employees who represent 23 different nationalities – I think that is very Australian indeed.” Emma & Tom’s range of products are currently distributed across more than 5,000 outlets in Australia, including David Jones, Thomas Dux and the major grocery chains. They are also exported to Singapore, Malaysia and Jordan – with the products set to launch in China in the near future.

The Brand: Emma & Tom’s is an innovative Australian-owned healthy drinks and snacks company focused on providing healthy and nutritious premium products. Their slogan, ‘Look After Yourself’, emphasises their dedication to producing food and drinks that are all-natural, contain no added sugar and are minimally processed.

RESVERATROL: the secret science behind healthier wine Oenotherapy (therapeutic practices based on wine). In 2006, after considerable refinement of the process, Dr Norrie produced his first batch of the recently patented, antioxidant-rich Resveratrol Enhanced Wine (R.E.W.), now produced and exported into China by Nodens Group. Common wines contain only one to four milligrams of resveratrol per 750ml of wine, but R.E.W. contains as much as 75mg of resveratrol in the same amount of wine. Resveratrol is, like most health compounds, best absorbed as a liquid directly through the lining of the mouth rather than after passing through the nutrient-limiting liver in a tablet. However Dr Norrie knows that not everyone wants – nor is it recommended – to drink large amounts of alcohol to get the benefits of resveratrol. That’s where he and Tony Yew – the joint owner of the R.E.W patent and Managing Director of Nodens Group – got the idea for Reselixir: a concentrate of resveratrol-enhanced red wine that provides the equivalent of up to ten bottles of wine’s worth of resveratrol in a tiny 30ml bottle. The development of R.E.W. and Reselixir demonstrates a particularly ingenious Australian innovation, building on the research of the Western world while also engaging with the traditional and medical knowledge of Asia – just one of the many reasons why R.E.W. is so well regarded in both places. Good preventative medicine is always preferential to curing ailments once they arise, and Dr Norrie has shown through the popularity of his R.E.W. in China and Australia that this is a belief common to people the world over.

There is evidence that wine has been used as a traditional medicine for thousands of years, with references to it being used medically in ancient Egyptian and Hippocratic texts. After noticing a lack of information about the holistic use of wine in Australia, Dr Phillip Norrie – a general practitioner and vintner – decided to create his own blend leveraging the benefits of an anti-oxidant rich compound that occurs naturally in wine called “resveratrol”. After years of research into the historical role of wine in preventative medicine and the publication of a nearly 700-page thesis on the health benefits of wine and resveratrol, Dr Norrie started his own wine label, The Wine Doctor. Building on twenty years spent winemaking in the renowned wine-growing Hunter Valley region, Dr Norrie realised that producing a resveratrol-rich wine that tasted good would be no easy task. Certain compounds, though showing holistic promise, affected the wine’s taste. “You can’t increase the salicylic acid in the wine because it’s bitter,” Dr Norrie explains. So he took a page from the research of a fellow Australian – Professor David Sinclair, head of the Anti-Aging Laboratory at Harvard Medical School – and explored the use of the “more therapeutic” functional compound resveratrol. Sinclair had discovered a method of using resveratrol to stimulate mitochondria, the body cells’ energy powerhouse, thus building the blocks for modern

The Brand: Nodens Group Ltd is a Sydneybased wine producer and exporter with operations and vineyards in the Barossa Valley and McLaren Vale. It prides itself on producing and distributing high-quality wines and apple cider to markets in China and other parts of Asia. Through carefully developing close relationships with the Chinese wine industry – including importers, wholesalers and retailers – Nodens has been able to create an extensive distribution and marketing network of over 40 franchisees and distributors covering many cities throughout China.

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BIO ISLAND fortifying health for the whole family

With a focus on children’s health, Bio Island entered the marketplace in 2008 with innovative supplements that supported healthy growth and development. Eight years on, the recent addition of an adult vitamins range has boosted the already-strong market recognition of their products. Proudly made from premium ingredients, Bio Island caters to the needs of parents who don’t have a simple solution when it comes to providing their toddlers and newborn babies with vital nutrients. The company’s expertise in nutrition and science, as well as their attentive research, led them to identify and target common nutritional deficiencies not just in Australia, but around the globe. Their latest popular supplement concentrates on one important nutrient: calcium, which plays a key role in the structural development of children. Derived wholly from a natural source, Milk Calcium is made to meet the rapid growth rate of young children and help developing bodies maintain strong, healthy bones and teeth. Bio Island’s Milk Calcium soft gel capsules can be taken by children as young as four weeks old. Since the soft gel capsules can be simply and conveniently squeezed onto food, they are an ideal alternate way of getting crucial nutrients into small tummies. Including vitamin D in the capsules allows for normal calcification of the skeleton and uncomplicated calcium absorption. Bio Island launched Milk Calcium Bone Care in 2015 to extend the same technology to adult health and help families struggling to get the most nutritional benefit out of their diets. Milk Calcium Bone Care is the first product in Australia to introduce non-synthetic calcium for adults in an easy-to-swallow soft gel form. Safe for pregnant or breastfeeding women, it’s made using natural calcium hydroxyapatite, a pure compound found naturally that eases digestion. Drawn completely from fresh dairy sources, Milk Calcium Bone Care, helps maintain strong bones, teeth, nerve transmission and

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muscle contraction in adults. The supplement contains calcium absorption-enabling vitamin D and vitamin K2, which fortify bone mineral density and can protect arteries from calcification. As an AUST L listed complementary medicine produced in compliance with Good Manufacturing Practices (GMP), Bio Island’s dedication to a healthy lifestyle in Australia has seen them become the official nutrition partner of the Australian Swim team. Bio Island’s superior products not only meet the training demands of elite athletes like Olympic swimmers, they also promote a healthy, active lifestyle in youngsters. A natural and clean supplement, Milk Calcium Bone Care has passed anti-doping product testing, making it a suitable sports supplement. Bio Island is dedicated to providing the entire family with premium quality nutritional supplements. Their wide range of health products are sold in local pharmacies in Australia and are gaining traction in China and Vietnam. Passionate about nutrition and wellbeing, Bio Island has secured its place in the health-conscious community by understanding the nutritional needs of consumers regardless of location.

The Brand: The blue font and colour of the hummingbird denotes trust, purity of source and protection. Bio Island’s products, like the company’s hummingbird mascot, are small but cleverly designed to look out for you. As a natural guardian, the miniature bird can nurture and do great things in the smallest ways.

INSTANT MILK powder stirs up a success

Maxigenes entered the ultra-competitive powdered dairy market in 2010 with a full cream milk powder sourced and made entirely in Australia from 100 per cent high quality, fresh cow’s milk. Increasing sales both locally and internationally have inspired Maxigenes to expand and add goat and sheep milk powders to their range. Sourced in Australia and New Zealand from real milk with no preservatives or additives, Maxigenes powdered milk products are made for consumers seeking nourishment from alternate sources, and are a substitute for people allergic or intolerant to regular dairy products. Their unique preparation and production process, which retains essential nutrients such as calcium, ensures a connection with the growing health-conscious consumer market. This focus on a natural and healthy product also resonates with the varied dietary requirements of consumers overseas who are looking for quality, fresh milk in a convenient powdered form. “Our powdered milk is synonymous with a clean and green Australian product,” explains Maxigenes General Manager Amanda Fox. “A lot of powdered milk is packaged here but manufactured overseas, you can’t find the source. That’s our point of difference – Maxigenes Full Cream Milk Powder is made in Australia.” Capitalising on the changing diets of modern consumers, Maxigenes saw a growing number of people needing to switch from regular dairy products and added goat and sheep milk to their range. Since goat and sheep milk is difficult to obtain as fresh produce, a powdered product was the perfect solution for people who still required calcium and essential vitamins and nutrients in their diet. Goat’s milk is high in calcium and Vitamin D, while sheep’s milk is a natural source of protein and Vitamin A – significantly higher than that in regular cow’s milk and gentler on digestion. Using goat and sheep milk, Maxigenes offers milk powders that

provide suitable options for the entire family: children over three years, pregnant women and adults. As Amanda notes, “you can still sit around the table and be part of a family meal despite your milk coming from a different source.” Their ‘Chewable Milk with Blueberry’ product – cleverly made chewable for hassle-free consumption – is a top seller. Not only is it a healthy snack for children from 12 months up, but handy for adults needing to refuel their active day. Using advanced technology, Maxigenes products are easily mixed with water to make fine creamy milk, tasty and full of texture. Beginning from powdered cow’s milk, Maxigenes products have now satisfied a niche in the market with wholesome and pleasant-tasting powdered goat and sheep milks. Sold in pharmacies Australia-wide, as well as extensively across China and New Zealand, their quality milk products are entering homes around the world.

The Brand: Maxigenes offers high-end powdered milk products. The simple blue of their logo represents freshness and purity of source, resulting in a product that can be trusted. The rounded, curved font symbolises inclusion; a product made for the whole family. The name Maxigenes is an amalgam of maximum and genetic: showcasing the company’s aim to “maximise genetic potential” by providing fundamental nutrition and nourishment to consumers.

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KUNZEA OIL: Tasmania’s

best-kept pain relieving secret

An entrepreneurial Australian family has harnessed the therapeutic benefits of the native Australian Kunzea plant to develop a range of natural products that provide relief and give people the freedom to do more of what they love. A naturopath for the last 20 years, Michelle Brass was convinced of the remedial benefits of the Kunzea ambigua plant after using the pure essential oil on clients in her clinic. Repeated requests for the oil from her clients encouraged Michelle and her horticulturalist partner Simon Brass to start investigating the full therapeutic properties of the plant. Also known as ‘tick bush’, the wild-growing plant is native to the cooler coastal regions of New South Wales, Victoria and Tasmania, and grows profusely in the rugged climate of northeast Tasmania and the Bass Strait. Aboriginal communities traditionally used the Kunzea ambigua plant to relieve irritated skin, muscle tightness and pain. Michelle experimented with the pure essential oil until she developed the ideal formula that could be safely used by her clients to help relieve everyday physical ailments. The demonstrated effectiveness of the Kunzea oil compelled the Brass family to launch their own commercial range of natural products, and thus Zea Relief was born. Their products are the first in the world to embrace the wildharvested Kunzea oil and the benefits embedded in the plant’s unique

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organic structure. Going forward, the Zea Relief team are looking to conduct further research into the oil to reveal its full potential. “Our farmers in Tasmania grow the Kunzea ambigua plant for us,” says Zea Relief General Manager Hayden Brass. “This allows us to monitor the harvesting and distillation stage of the process and ensures the Kunzea oil used in our products is of the highest grade and consistency for our customers.” Australian Kunzea Oil targets sore joints and the aches and pains caused by arthritis by being absorbed through the skin to target areas of inflammation. It is there that the oil triggers the body’s own healing process to relax muscles and ease pain. All of the products in the Zea Relief range contain the natural compounds in Australian Kunzea Oil. These compounds are shown to be extremely effective for both acute and common disorders. Zea Relief not only complements other recommended treatments, but aspires to enable those in discomfort to get on with the rigours of everyday life. Australian Kunzea Oil provides aching muscles and joints with the fast-acting and long-lasting relief chronic pain sufferers often seek. In addition to the pure essential oil, Zea Relief’s products come in a range of other convenient types, including an extra strength balm, cream and roll-on. In addition to its therapeutic benefits, the aroma of Australian Kunzea oil is often compared to the native scent of the Australian bush. “People often remark on the pleasant fragrance of our products,” says Zea Relief co-founder Simon Brass. “They love the naturally clean and fresh aroma of the Kunzea Oil.” With Zea Relief, the Brass family has made public one of Tasmania’s best-kept secrets. Now they want to share their knowledge of Australian Kunzea Oil to enable people around the world to live more fulfilling, pain-free lives.

The Brand: Zea Relief’s flower symbolises the native Australian Kunzea bush when in blossom and the company’s dedication to this unique essential oil. The colour green is used in their logo to signify life, renewal, nature and energy.

Healthy body, healthy outlook: professional nutrition for POSITIVE FUTURE

After decades of experience working in clinical practices and hospitals, Professor Ian Brighthope realised that guiding a patient’s nutrition could be the key to aiding their improvement. As a result of seeing firsthand the role played by a patient’s nutrition in stabilising their condition – particularly in people suffering from chronic illnesses such as diabetes or cancer – Professor Brighthope decided to craft his own line of specialty nutrition products. He began prescribing these products at his own clinic in the 1970s, and it was from these humble beginnings that Nutrition Care Pharmaceuticals began. Since then, Nutrition Care Pharmaceuticals has become a dedicated manufacturer of high quality vitamins and nutritional specialty products. As both the founder and Chief Executive of the company, Professor Brighthope is able to oversee the stability and proven effect of the Nutrition Care range with decades of experience in practical and scientific nutrition under his belt. “We are the only nutritional pharmaceuticals manufacturer with its own brands in Australia that is Australian-owned,” says Professor Brighthope. “We have absolute control of our materials, and test them thoroughly in our Therapeutic Goods Administration (TGA) licenced laboratory.” Nutrition Care boasts probiotics known and recommended the world over because of their technological advancements in stabilising

live cultures. Developed in-house this process, known as DryStart Technology™, is used to make Polybac 8™, one of Nutrition Care’s leading probiotics. Polybac 8™ combines the most reliable probiotic microorganisms occurring naturally in the human body to make a formula suitable for children and the elderly. But Nutrition Care deals with more than probiotics. “The other area we specialise in is looking at the ingredients of various plant products, taking those ingredients and making them more bioavailable, which means making them more reliably effective,” says Professor Brighthope. Nutrition Care has developed a way to boost the anti-inflammatory and antioxidant activity of curcumin, the active ingredient in the Cumerone® product range. Curcumin is derived from turmeric – a perennial herb belonging to the ginger family well known for its therapeutic functions – and commonly used as a spice in southern Asia, especially in India. Nutrition Care’s best-selling pain relief product, Nalgestic XL with TurMeriide™, contains active curcumin, making it an effective anti-inflammatory. “We are very interested in traditional medicines, whether they are Chinese, Indian, Middle Eastern or Western traditional herbs,” explains Professor Brighthope. “We are always looking to improve the efficacy of our products: we know that they work, we know that they are effective, but we just want to make sure that they are reliably effective and that we understand more about their actions in the body.” Nutrition Care was the first Australian exporter of nutraceutical products to China, and also exports to Indonesia, Thailand, Poland, Singapore, Malaysia and New Zealand. In addition to this, all Nutrition Care products are currently sold on the largest e-commerce platforms in China, including Tmall.hk, JD.com and VIP.com.

The Brand: Nutrition Care is an Australianowned, premium nutrition and herbal specialty products manufacturer. Their philosophy is to develop and provide safe and effective healthcare products by reliably combining knowledge from different medical and scientific disciplines and passing it on to people around the world. Their blue hexagonal logo surrounding a yellow flower with six petals represents the embrace of life’s natural chemistry.

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SARIN MARINE FARM hooks world tuna market

In 1997, David Sarin combined his background in the tuna industry with a commerce degree to establish Sarin Marine Farm. Twenty years on, the company continues to be a leader in the industry, recognised worldwide for supplying sashimi markets with high-quality Southern Bluefin Tuna. Sarin Marine Farm (SMF) was created in order to meet market demand for Southern Bluefin Tuna, recognised as one of the best fish to eat raw in sushi or sashimi. While the early success of the company was driven by the demand for tuna in the Japanese market, the popularity of Japanese cuisine worldwide now sees SMF expanding into other markets. Through trial and error and significant investment into new technology, SMF have continuously refined their farming methods to drive their business forward. In 2011, SMF made the pioneering decision to start farming in the offshore zone, in order to ensure their tuna stayed healthy for as long as possible. “Ultimately, we wanted to simulate as close as possible the natural environment of the fish in our marine farm,” says David Sarin, President of SMF. “We are now the only Southern Bluefin Tuna producer that currently farms in an offshore zone.” SMF catch their tuna in the deep, pristine waters of the Great Australian Bight. By cultivating the fish in deep water, they ensure the tuna develop at a healthy rate in a natural setting. They then carefully tow the live tuna to their farm site, 24 nautical miles east of the South Australian town of Port Lincoln. This optimal setting helps SMF produce tuna with optimal fatness, oil and natural colour. “Our fish quality is better, fattier, stronger and tastier,” says David. “The colour of the tuna we farm is vivid, resulting in a premium quality yield.” SMF tuna are monitored on a daily basis by a team of experienced staff and are given high-quality feed caught from a mixture of small

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pelagic species, sourced and formulated to maximise the nutrition in their diet. Harvested in the winter months, the tuna are bled, hygienically gilled and gutted immediately to minimise handling time and ensure freshness. Committed to offering their consumers a premium product, SMF delivers their tuna ‘super frozen’. SMF’s tuna go through a flash freezing process where the fish is rapidly frozen to halt cellular activity and natural decay, before being stored at -60 degrees Celsius to ensure no deterioration of quality. This means that once the tuna is defrosted, it is restored to the exact point in time it was frozen – guaranteeing freshness and increasing its shelf life. Following their company motto, “quality because we care”, SMF’s goal is to produce and provide the best possible tuna product to meet consumer satisfaction, while preserving natural eco-systems. Currently expanding into China, the UK and Europe, SMF’s premium Southern Bluefin Tuna already has the sashimi market hooked.

The Brand: The two fish entwined in the Sarin Marine Farm logo represent the tuna product, and also spell the letter ’S’ from the company name. The two tone of blue signify the ocean and represent a natural, fresh source of fish product. The traced globe re-affirms SMF’s global recognition and market.

PRISTINE PERFECTION from paddock to plate

The largest biodynamic-organic dairy company in Australia, B.-d. Farm Paris Creek makes dairy products that are free from artificial ingredients and farm chemicals. Their multiaward-winning range and state-of-the-art manufacturing plant has seen them become one of the most successful agricultural companies in Australia. B.-d. Farm Paris Creek was founded by German-born husband-andwife team Helmut and Ulli Spranz. Having travelled through Australia in 1983 on a holiday visit they were inspired by Australia’s natural, clean and pristine environment and decided it was the ideal place to establish a biodynamic-organic dairy business. They migrated in 1987 with their two young children, and found the perfect home for their venture nestled in 170 acres of pasture at Paris Creek, South Australia. With a commitment to providing the best biodynamic-organic dairy produce on the market, all of the B.-d. Farm Paris Creek products are free of artificial ingredients, such as preservatives, colours, flavours or stabilisers. “Our products are not over-processed as it changes the natural structure of milk too much,” says Ulli. “We want our products to remain as natural as possible.” Their biodynamic approach (B.-d. Farm Paris Creek stands for ‘the Biodynamic Farm at Paris Creek’) from the paddock to the customer’s plate focuses on preventative methods on the farm to ensure biodynamic standards are met in soil, pasture and herd management. The whole farming circle is kept in a sustainable balance without the use of chemicals, and the Spranz’s even produce their own fertilisers made from minerals and natural ingredients grown on the farm. The company’s wide range of products include white milk, flavoured milk, yogurt and quark, as well as handcrafted artisanal

butter, French-style soft cheeses (such as Brie and Camembert) and European-style hard cheeses (Gouda, Fetta and Cheddar) – all of which have won multiple awards. This year, they also launched a new milk brand called Adelaide Hills Dairies to support local dairy farmers and help them during the pre-certification phase to become certified biodynamic. A recent major expansion of their manufacturing plant features a hi-tech plant that will extend the shelf life of fresh milk for the export market without altering its natural goodness. All of the company’s products are made at this state-of-the-art manufacturing plant, which has been recognised as one of Australia’s most energy efficient manufacturing plants. It is also the most award-winning manufacturing plant in South Australia, having won awards for innovation, leadership, environmental sustainability and workforce care. “Organic is the fastest-growing agriculture sector and our aim is to supply the most premium biodynamic-organic dairy products to as many families as possible, and in doing so support the overall health of our customers,” says Ulli. B.-d. Farm Paris Creek products are available nationwide in health food stores, independent supermarkets and major retail outlets such as Woolworths, Coles, ALDI and Costco. They also have export markets in Singapore, Hong Kong, Fiji, UAE, Qatar and Brunei with further expansion, especially to China and Taiwan, on the horizon.

The Brand: B.-d. Farm Paris Creek is a multiaward-winning Australian company that makes biodynamic-organic dairy products from premium, high-quality milk. Staying true to their brand name (B.-d signifying biodynamic), nothing is artificial in their production, from the paddock to the plate – there are no GMO’s used on the land, no antibiotics or hormones administered to the animals and no artificial ingredients in the final dairy products.

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Realigning the body’s balance

Fem21 is an all-natural herbal formula designed to help women achieve hormone balance and overall wellbeing. Developed by qualified naturopath Meah Robertson, the Australian-made product has transformed the lives of countless women by targeting a range of health issues. Maintaining a balance of hormones is important throughout every stage of a woman’s life – from addressing bad acne to dealing with irregular cycles, premenstrual syndrome, fertility issues and menopause. Specialising in women’s health and fertility since 2006, Meah saw the need in the market for an all-natural product to help support women suffering from these conditions – and Fem21 was born. The concept for Fem21 was inspired by Meah’s own first-hand experience – both in seeing women suffering from a variety of hormonal issues as a practicing naturopath and dealing with the same problems herself.. “When I worked in a fertility clinic, I saw a lot of women who had hormonal issues with their adrenal or thyroid glands and their digestive systems, all of which are important when you are trying to conceive,” says Meah. “I realised there was nothing natural on the market that supported women in terms of cleansing and aiding hormone balance, so I created Fem21 to address that.” The foundation of Fem21 is its special blend of ingredients made

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from a variety of herbs, fruits and vegetables. Using her clinical background, Meah spent 12 months researching each ingredient to create the perfect blend that not only mixes well, but also tastes pleasant. Manufactured on the Gold Coast, each herb has been chosen for its specific health benefit and function. The formula works to rebalance hormones, cleanse the body by targeting the liver – the body’s natural detoxifying organ – and reduce stress by alkalising the body. Most importantly, the formula does not contain any artificial ingredients, fillers or sugar. It is also suitable for those that are intolerant to gluten, dairy and soy and is GMO-free. “The herbs that specifically target hormonal balance in Fem21 are chaste tree, licorice and black cohosh, while herbs such as milk thistle, dandelion and rosemary target the liver,” says Meah. “Ingredients such as wheatgrass and barley grass are the active alkalising ingredients, and are also rich in chlorophyll and antioxidants, which help slow the aging process.” The powder can be easily mixed in water, juice or smoothies and a simple cleansing recipe that Meah uses regularly includes one scoop of Fem21, half a lemon, half a green apple, half a cucumber, two handfuls of spinach leaves and two teaspoons of chia seeds blended with coconut water. Fem21 is currently available throughout Australia in health food stores and naturopath clinics, and Meah has plans to expand the line to include products for men and children. “In the next five years, I would love to see the product bloom in the Chinese market where I think it will benefit women who are suffering from a range of health issues due to the environment,” says Meah. “With its natural herb ingredients, Fem21 is a balance of traditional Chinese medicine with clinical western medicine – and it has a wonderful capacity to help women regain their strength, hormonal balance and overall health.”

The Brand: Fem21 is an all-natural herbal

formula developed to help women maintain a hormonal balance in the body and achieve overall wellbeing. The logo signifies the unique blend of 21 herbs, fruits and vegetables formulated especially for women, with the rainbow spectrum representing a healthy balance emanating from within the body.

Aussie water making waves with our consumers, and we wanted to create a thirst for a product that positively impacts the body, mind and planet.” Aqualove has proven to be a big hit incredibly quickly – just three months after its launch, the company signed a contract with Woolworths to secure distribution across the country. Its strong presence and recognition in the marketplace in such a short period of time is no coincidence – health-conscious consumers love the fact that Aqualove taps into the numerous benefits of maintaining a balanced pH level in the body, such as improved digestion, less fatigue, increased weight loss and improved blood pressure. “The pH scale measures the acidity or alkalinity of a substance, ranging from 0 to 14, with the top end being highly alkaline,” says Ricky. “For optimum health, our bodies need to maintain a good level of alkalinity between 7.2 and 7.6pH. So much of what we eat and drink these days is highly acidic so it is important to counter that with high alkaline intake.” Following months of research and development, Ricky and Garrett found a unique production system unlike any other, one that ensures Aqualove offers optimum pH levels and tastes great at the same time. And staying true to their core values, the company utilises biosphere packaging technology to efficiently ensure Aqualove bottles biodegrade in under five years. In addition to Woolworths supermarkets, the product will be available online through The Distributors – Australia’s leading servicer to petrol and convenience stores – in January and directly through the company’s website, with plans to distribute overseas in the near future. “Our aim is to grow the brand through multiple dynamic ‘healthy for you’ waters, which we expect to launch mid next year,” says Ricky. “We have already begun R&D on follow-up beverages to our alkaline water, with some really exciting new products in the works.”

The Brand: A unique high alkaline water

Founded in January 2017 by two young entrepreneurs – Ricky Herbert and Garrett Jandegian – Aqualove Water is a new alkaline beverage that offers an alternative way to neutralise the body’s pH balance. Based close to Sydney’s iconic Bondi beach, Aqualove is making waves across the beverage market for its unique properties, health benefits and sustainable approach.

product, Aqualove’s name represents the company’s core product and shared passion for a healthy and balanced lifestyle. This is reinforced by its multi-colour palette design, which draws from the colour chart of the pH scale.

After six years of successfully managing a beverage distribution company together, Ricky and Garrett took the opportunity to develop their own product when they realised there was a gap in the Australian market for healthy beverages. “We noticed a clear shift in consumer demand towards healthier, lower calorie categories,” says Ricky. “We wanted an innovative and sustainable product in line with our lifestyle that we believe resonates

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THE ENJOYABLE EGG Pace Farm’s free range eggs are produced to the highest free range farming practices. Hens are provided with access to roam outdoors during the day and are housed in safe and warm barns at night. In 1997, Pace Farm established the barn-laid, cage-free system of egg production. These hens are cage-free and live in large barns where they have constant access to fresh food and water. “The Liberty barn-laid egg production enable our hens to move freely within the hen house and express their natural behaviours, flap their wings, perch and lay their eggs in secluded nest boxes,” explains Paul. “Hens that produce our Natural Living free-range eggs have the same freedoms as our Liberty barn-laid hens, with the addition of access to outdoor ranges for up to eight hours during daylight.” A champion of improvements in industry and product innovation, Pace Farm established one of the world’s most modern facilities in 2006 with their environmentally-friendly Wattle Ridge farm. Hens at the facility are fed with wholesome natural grains, producing an equally wholesome and healthy egg. A unique aspect of the facility is that the eggs are untouched by human hands; they are graded, packed and sent mechanically for delivery on the same day ensuring the freshest eggs are produced with the highest level of food safety. Complementing their fresh egg production, Pace Farm also supplies a range of egg products ideal for commercial or large-scale production kitchens, featuring items such as meringue mix, pasteurised whole egg, frozen scrambled egg mix, egg yolk powder and pavlova mix, all of which are produced in their egg processing plant.

For over 35 years, Pace Farm has been delivering farm fresh eggs to Australian families. The nationally successful company is wholly managed by an Australian family – the Pace family – who are involved in every aspect of the business, from rearing day-old chicks to delivering their products to stores across the country. Overseeing multiple farming sites with different fresh egg productions, Pace Farm offers free range, caged and barn-laid (cage-free) eggs and organic eggs. It is the foremost producer of eggs and egg products in Australia and one of the leading environmentally friendly egg producers in the country (see page 143). Pace Farm has launched specialist brands such as Liberty Cage Free and Natural Living Free Range in recent years in response to consumer demand for products that are animal welfare friendly. “Consumer demand drives all successful business; we are committed to producing high-quality products from hens that are cared for to the highest welfare standards,” says CEO Paul Pace.

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The Brand: The Pace family has been delivering farm fresh affordable eggs to Australian families for over three decades. An Australian family company, they don’t just talk about family values, they live them. They take great pride in delivering the highest quality product – the enjoyable egg – to Australian families.

Organic Merchant: the naturopathic way of tea together in perfect alignment to captivate the senses, heal the body and soothe the mind. “When my blends are tried by so many people, I get instant feedback and understanding of what tastes amazing and what people love,” says Chalimah. “We have used this feedback to create the entire Organic Merchant range.” From its humble beginnings at Sydney’s Paddington Markets in 2011, Organic Merchant has doubled in size each year since its creation. Chalimah sees great potential to expand her company by introducing additional 100 per cent organic, health-based products. As a mother of two young children and a successful businesswoman, Chalimah understands the challenges and time constraints facing working mums each day. With this in mind, she created the Pregnancy and Women’s Teas range to provide therapeutic support in the form of a tea infusion to women. “The Mother Nurture Tea in this range helps nursing mothers to produce high-quality milk, relieve colic in the infant and nurture the bond between mother and child,” she says. All Organic Merchant products are 100 per cent Australian Certified Organic, and all ingredients can be traced back to their exact farm of origin. The herbs are sourced both locally and from overseas in an ethical fashion, which is also reflected in the sustainable packaging. The entire hand-blended range is presented in reusable solid glass jars and biodegradable sachet boxes which are printed with eco-ink, made from recycled paper with a compostable plant-based cello-bag.

Building on 20 years of experience in naturopathic and herbal medicine, Sydney local Chalimah Jeanne has created her own brand of herbal teas: Organic Merchant. The company produces an extensive range of hand-blended loose leaf teas, iced teas and herbal infusions, all designed to heal the body and soothe the mind. After studying horticulture, Chalimah decided to move into the field of naturopathy and started working at a multidisciplinary clinic. Seeing doctors and naturopaths work together made her believe that traditional medicine could be integrated with natural therapy to improve patient health. This inspired her to create her first range of herbal teas. “To me,” says Chalimah, “blending teas was a way of offering patients a simple daily nourishment and it all grew from there.” Her teas soon gained a reputation for both their taste and health benefits and Chalimah was asked to create more blends. Over time her work grew into the extensive Organic Merchant range seen today, offering over 35 different teas. Chalimah sees her tea as a bridge between proven health practices and the creative yet vibrant atmosphere of organic handcraft. As such, the entire range is 100 per cent Australian Certified Organic, handblended in Sydney and – unlike many other commercial tea brands – made without additives, sugar, flavourings or pesticides. The blends not only have diverse therapeutic properties, but also rich flavours and a kaleidoscope of colours and aromas all working

The Brand: Organic Merchant produces an inventive range of premium loose leaf, organic teas developed from a therapeutic and holistic approach. Their philosophy maintains a natural purity in all aspects of living. Its black and white logo with a floral arch over the banner of the company name reflects the application of the purest botanicals in an organic fashion.

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Naturally brave, naturally Australian

NATURALLY SUGAR-FREE

Nexba is the brainchild of Troy Douglas and Drew Bilbe, two young Aussie boys who shared a vision to revolutionise the beverage industry with natural sugar-free beverages. Within a period of just six years, they have been able to transform what began as a vision into a commercial success – their products are now stocked nationally, and will soon go global. Nexba was established in 2010, built on the idea to make healthy ice teas that formed when Drew was studying in Mexico. Upon his return, he partnered with his brother-in-law Troy, a likeminded entrepreneur, to turn that idea into a reality. “The Nexba vision is to transform lives by being the ‘Naturally Brave’ brand that delivers naturally sugar-free product innovation,” says Troy. “Our beverages are the first of their kind to launch in the Australian market.” “The primary difference is that we only use natural ingredients, whereas other sugar-free products tend to be full of artificial nasties.” In 2016, Nexba partnered with supermarket chain Coles to expand their brand beyond ice teas and develop sugar-free soft drinks. Reinventing traditional soft drinks, Nexba is the first in Australia to launch naturally sugar-free Cola, Lemon and Orange Sparkling Infusions. Instead of sugar, Nexba uses its own proprietary blend of natural sweeteners. Developed through intense research and development over a number of years, Nexba has created a natural combination of stevia (a plant native to South America) and erythritol (a natural sweetener). “Our blend has the mouth feel and sweetness profile of a full-sugar soft drink, but without the calories,” says Troy. Nexba’s line of products include a selection of flavoured ice teas (peach, watermelon and cherry lime) and a range of sparkling infused

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drinks with flavours such as cola, ginger, acai berry and pomegranate. The company has won multiple awards in its short existence, including Australian Micro Telstra Business of the Year in 2015, and Troy and Drew definitely don’t have plans to slow down. Instead, they are on a three-year plan to accelerate Australian growth and activate product innovation and global expansion – aiming to apply their natural sugar-free formula to new food products beyond beverages. “Our vision is to expand our distribution into all major retailers and ensure the Nexba products are widely available to everyone looking to remove sugar from their diet, both domestically and internationally,” says Troy. Nexba products are currently distributed across the major Australian supermarket chains, petrol stations and convenience stores, as well as local school canteens. Their global expansion is set to take off in 2017, with plans to have their naturally sugar-free beverages reach new shores.

The Brand: The Aussie founders of Nexba live their lives to inspire future generations to make healthy lifestyle choices. Their vision is to transform people’s lives by being the naturally brave brand that delivers naturally sugar-free product innovation.

The good oil from LONGRIDGE OLIVES Just over 20 years ago, the Rowntree family bought a property near Coonalpyn in southeast South Australia to expand their dairy farm. However they soon discovered that the property was perfect for growing olives, and Longridge Olives was born. After undergoing a study tour of Israel to examine similar growing conditions, the Rowntrees planted 7,200 olive trees in 1998 and entered the olive business. In 2009, they expanded their operation and planted a further 80,000 trees, with the company now running the largest super high density olive grove in Australia. Their location, in the Mallee region of South Australia, provides the hot, dry summers and cold winters comparable to the famous olive growing regions of the Mediterranean. The Mallee provides not only the perfect climate and sandy, well-drained soils, but also the remoteness that means Longridge olives grow in one of the most pristine environments possible. “One of our biggest assets is our isolation, the fact we don’t have anything else around us,” says Owner and Director Lisa Rowntree. “Managing our biosecurity and managing potential pests and diseases is actually really easy to do out here.” This unique growing environment combined with careful grove management ensures that the olive trees remain healthy, reducing the need for sprays. The result is

an abundance of good olives that are then pressed within 24 hours of harvest to become Longridge’s Extra Virgin Olive Oil – a fresh, healthy and flavoursome olive oil that will complement any dish. “If you start with a perfect olive, then you’re going to end up with a fresh, balanced olive oil,” says Lisa. “A really good olive oil should not taste fatty on the tongue – it has beautiful aromas and flavours that enhance the taste of food and help carry nutrients from vegetables into your body.” Lisa’s husband Jim looks after the processing of the oil, taking care to ensure that their oil retains its health benefits and flavour. As a result of their excellent olives and attention to detail in processing, Longridge Extra Virgin Olive Oil has won a long list of prestigious awards both in Australia and overseas, including a gold medal at the 2015 Olive Japan International Extra Virgin Olive Oil Competition and Best of State for South Australia at the 2016 Australian National Extra Virgin Olive Oil Competition. Longridge oil products can be bought in IGA supermarkets, fruit and vegetable stores, markets and tourist information centres across South Australia and Victoria. It is also exported to Japan and the United States, with plans to expand to India, China and Taiwan. For Lisa, customer satisfaction is the most important part of the whole operation. “We take our oil to people who appreciate its health benefits and appreciate the flavour,” she says. “There’s enough of those people in the world for us to find a good market, and it feels satisfying to be making a product that is of such a high quality and also good for people.”

The Brand: Longridge Olives is a family-owned, South Australian producer of healthy and high-quality extra virgin olive oil. Their logo – a kangaroo with an olive branch in its mouth – is not only distinctively Australian, but also a snapshot of life on the Longridge farm. Lisa is a member of the Native Animal Network and raises orphan joeys, who love to eat olive branches!

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BUZZ HONEY – swarming with success

Former gourmet shop owner Annette Ferris and her husband Barry bought Buzz Honey from its original owners in 2012, and quickly expanded the company’s range of raw honey and bee-related products. Since then, they have taken the business from a small farm shed to a modern flagship store, making their new enterprise a hive of activity. Buzz Honey is a family-owned business based in Totness in the Adelaide Hills that produces pure, raw honey. A process that takes most of the year, honey production starts with active pollination in late July. Hives are then moved through specific regions in South Australia – depending on which native plants are flowering and where – ending in March when temperatures cool. Sourced from various districts across Australia, the seasonal nature of Buzz Honey’s products results in varieties of honey with unique tastes that stem from both popular and exotic flowers: Blue Gum, a eucalyptus honey that is gathered from native bushland in the Adelaide Hills; Orange Blossom honey from South Australia’s Riverland; and a leatherwood honey – with health benefits comparable to Manuka honey – that is sourced from the Tarkine Rainforest in Tasmania. “We produce a single source honey – we don’t blend, water down or heat-treat our honey,” says Annette. “Once you start heating over 45 degrees Celsius you are fundamentally destroying the potent qualities that honey contains.” One of the few commercial beekeepers in Australia using coldpressing methods, Buzz Honey is chemical free, providing maximum health benefits and superb flavours. As raw honey is a crude fructose compound its low Glycaemic Index (GI) means it can be metabolised significantly better by people with diabetes, unlike regular honey which is a sucrose or glucose composite. The cold-press extraction methods utilised by Buzz Honey means their raw honeys also preserve natural enzymes and are preservative-free.

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The Ferris’ are passionate about the importance of bees and offer a hands-on, five-hour workshop where an experienced beekeeper teaches the basic principles of beekeeping. “It’s all about making sure we are responsible beekeepers producing premium honey,” says Annette. “We’re also happy to share with our customers how our products are made and just how amazing bees are.” Buzz Honey’s hard work and commitment to their products has seen their honey win a string of awards for colour, flavour and clarity with two silver medals at the 2016 Sydney Royal Easter Show National Honey Competition and a silver and a bronze medal at the 2015 Melbourne Fine Food Awards. Buzz Honey’s customers are diverse and spread across the country, reaching enthusiastic restaurateurs in the Hilton and InterContinental hotel chains, as well as Parliament House in Adelaide. Their products are also available online and in independent grocers, gourmet stores, butchers and health food stores. Buzz Honey also exports to Malaysia, Brunei and Singapore, with Hong Kong, Thailand and China soon to follow.

The Brand: The bold white, orange and black colours used in the Buzz Honey brand name unmistakably represent the colour of bees and honey. The playful, dotted, yellow line portrays the flight path of a bee and represents how the company sources its premium product purely from nature.

Success built on connection and partnerships

A health and wellbeing food business, Annex Foods offers not only a complete food production service but also a range of healthy, nutritious and wholesome food products. The company’s operations support an efficient paddock-to-shelf supply chain that benefits all parties involved. Leaving no stone unturned, the company provides a truly in-depth service that covers the entire supply chain. Annex’s operations include research and product development, sourcing and procurement, blending, packing and manufacturing, sales and marketing, customer service, warehouse storage and logistics. “Annex Foods was established with the vision of bringing healthy Australian-made foods to consumers in Australia and Asia,” says Managing Director Kane Fetterplace. “We are a family-owned company that works in partnership with Australian farmers to build a sustainable supply chain with a ‘win-win’ approach for all parties involved.” The company is based in Clayton South, Victoria where its impressive 20,000 square metre food production site is located. The state-of-the-art facility is designed to meet many of the world’s leading quality control systems and processes, and also has the capabilities to manufacture kosher, organic, halal, gluten-free and nut-free food products. The company’s food expertise is focused in two key areas: cereals and snacks and dairy and functional health products. Keeping in line with their vision of offering the best nutritious

products to consumers, the company expanded their operations several years ago to develop their own range of healthy food products. “In 2013, we started to focus on developing a sugar-free health food range that Australian families could trust to provide nutritional benefits,” says Kane. One of the company’s well-known brands is the Red Tractor label, which offers high-quality natural ingredients sourced from leading Australian farms. Their products range from quinoa to instant oats, chia seeds, manuka honey harvested from Australia’s east coast and a variety of granolas, with plans to expand further into snack foods and dairy powders. Building and forming relationships with Australian farmers is of utmost importance to the company, which supports numerous farming families across the country. Annex Foods seeks partnerships with farmers who support the same core values as the company, providing consumers with clean, healthy and wholesome food products. They source golden flaxseed from one of Australia’s leading organic farms, Flax Farms Australia (Waltanna) in Western Victoria, and oats from the Wimmera and Lime Stone Coast regions, renowned for their clean and green environment. A key to Annex’s success is the strong partnerships they have formed in export markets, particularly across Asia. The company currently has export partners in China, Malaysia, Singapore and Hong Kong, where they provide consumers with the company’s brands as well as private label foods – all of which are 100 per cent Australian-made. “It is our belief that we can only be successful in export markets if we are aligned with a partner who understands the local dynamics,” says Kane. “Thus far, we’ve achieved far more than we could have by ourselves, and we see further scope for growth in this aspect in the future.” Since their establishment in 1997, Annex Foods has adhered to their original vision and belief: that success is built on longterm relationships, respect, personalised service, quality, value and innovation. These building blocks have served the company well so far, and will without doubt continue to do so in the future.

The Brand: Annex Foods gives consumers food products they can trust for health, nutrition and labelling transparency, and food products that also celebrate the provenance of ingredients as signified by the green leaves on their logo.

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Innovating inspires ZERELLA FRESH and environmentally responsible manner. Zerella has a diverse range of farming locations with different climates and soil types, allowing it to grow and supply fresh produce year-round. This versatility allows the company to be innovative – both with its products and the technology it uses to produce and distribute them. After harvest, Zerella’s carrots, onions and potatoes are packed and distributed using product cooling and optical grading technology to ensure freshness and extend shelf life. “For Zerella, innovation is looking at the products that we grow and the way we pack them to make sure we can improve our reliability and consistency in quality and supply,” says Paul. “It’s also important to ensure they’re presented in a way that is attractive to the customer in terms of convenience and overall experience.” One example of the company’s commitment to product innovation is the recently launched SPUD LITE™ potato brand. After considerable market research, customer feedback revealed there was a perception that potatoes were high in carbohydrates and therefore unhealthy. In response, Zerella developed a brand that is 25 per cent lower in carbohydrates, with only 8.9g of carbohydrates per 100g. “With the information from our market research, we were able to look for innovative ideas to remove the barriers to consumption of potatoes,” says Paul. “Once we found a variety that was naturally low in carbohydrates, we worked on growing methods that ensured a consistently low carbohydrate level that we could deliver to the customer.” Zerella’s quality fresh produce – including the SPUD LITE™ potato brand – can be found throughout Australia and increasingly in Asia.

Zerella Fresh has an 80-year history of growing and packing vegetables for Australian consumers. Now a fully verticallyintegrated producer, Zerella is one of the major producers in Australia with its fresh carrots, onions and potatoes sold all across the country and in parts of Asia. With 18,000 hectares of growing land, Zerella produces in excess of 100,000 tonnes of potatoes, 40,000 tonnes of carrots and 30,000 tonnes of onions annually. Under the ownership of Mark Pye since 2009, Zerella’s long-term strategy is to invest in fresh growing land and sustainable water resources to ensure a consistently high quality of produce. “Mark and his family have been involved in horticulture and agriculture in Australia for over 30 years, and Mark provides a lot of both strategic direction and engagement with customers,” says General Manager Paul White. “He understands market trends, but is also intimately involved in the day-to-day farming and packing operation.” The company has a commitment to following the best farming practices to not only ensure the premium quality of the vegetables, but also to develop a clean, green and sustainable growing environment. Using variable rate irrigation technology, composting, soil and yield mapping, cover crops and soil science allows Zerella to provide each plant with the optimum quantity of water and nutrients in a sustainable

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The Brand: Zerella Fresh was known as Zerella Holdings up until Mark Pye’s ownership of the company in 2009. The change of name to Zerella Fresh keeps the recognition of the 80-year-old Zerella brand and highlights the company’s focus on fresh produce. The green leaves and text of their logo only reinforces this fresh, natural image.

RAINFOREST FOODS – The jewel of Byron Bay

Starting out in 1995 with a passion to regenerate and conserve the sub-tropical native Australian rainforest on his family farm, Anthony Hotson turned the fruits of his labour into a commercially viable crop. He began to add value to the crops and later established the company Rainforest Foods Pty Ltd to produce a range of products featuring jams, jellies, sauces, honey and nut products made from native fruits and spices. Faced with land degradation and erosion, Anthony unlocked the full potential of his farm in the hinterland around Byron Bay by nurturing native rainforest plants back to life and making sustainable food products from the trees and shrubs. We felt rainforest fruits had to be developed and we discovered flavours that people needed to know about,” says Anthony. “20 years later, most people still haven’t even heard of fruits such as finger limes or Davidson’s plums.” By bringing the taste of the rainforest to a wider market, Rainforest Foods provides an educational experience as well. The company takes pride in introducing new flavours to people and broadening their palates with the unique aspects of Australian native plants. In addition, their natural products give consumers an alternative approach to their diet, providing fresh, robust flavours that you don’t get from overprocessed commercial condiments. Carefully handmade in small batches in their Byron Bay kitchen, and with no artificial ingredients, their delicious range of gourmet

native fruit jams don’t skimp on fruit, but proudly showcase it! Rainforest Foods products are made using only superior fruits that are grown and harvested without the use of chemicals. “We have complete control of fruit quality,” says Anthony. “With our products being handmade, it’s a personalised process where excellence is of utmost importance to us.” The true taste of the natural rainforest can be found in their awardwinning deep crimson Davidson’s Plum Jam – made from the fruit of a local native rainforest tree that faced near extinction from land clearing. It’s sharp, tangy and tart flavour produces an aromatic and sophisticated jam, and a sauce made from the same fruit works as a perfect cooking accompaniment for marinades, satays and as a dipping sauce. Rainforest Foods also produces a comprehensive range of macadamia nut products, including their popular Macadamia Spread, which is freshly made from 100 per cent premium macadamias, and is a healthy, natural alternative to butter. Rich and creamy, smooth and delicious, it contains no cholesterol and is a rich source of monosaturates. An exciting new addition to their nut products is the Macadamia Cacao Spread – abundant in healthy fats and delicious, it combines raw, organic cacao with natural macadamia kernels and a touch of coconut nectar, resulting in a high-energy spread. Their Lemon Aspen Jelly is comparable to lemon butter with intriguing hints of eucalyptus and honey, and can be used in cakes, tarts and salad dressings. Their distinctive range of products, such as the exotic Finger Lime Marmalade, are used by celebrity chefs and high-end hotels introduced to the brand purely by word-of-mouth. Found in gourmet and health food stores, all Rainforest Foods products have no artificial colours, flavours or preservatives and are gluten-free. The company has a prominent retail presence in national parks, tourism outlets and airports and are featured in corporate gift hampers.

The Brand: The simple use of black and white in their logo and brand name signifies an organic, ethical business with an emphasis on authenticity and origin of product source. The wriggly black font refers to the pioneering, evolving native food industry that has played a role in conservation and regeneration of our native flora.

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Inside the Australian Agricultural Industry A look at the geographic and economic conditions that power Australiaâ&#x20AC;&#x2122;s agricultural strength, with key references and contacts.

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13/INSIDE THE AUSTRALIAN AGRICULTURAL INDUSTRY

Agriculture and agribusiness – the value chain Agriculture and fisheries, and related products and services, are a key component of Australia’s economy. G R A E ME P HILIPSON examines the data: the value add is enormous.

he total value of Australia’s agricultural industry, including fisheries, is $61.5 billion a year. That is the value at the farm gate. The total when you factor in value added – food processing, distribution, wholesaling and retailing – is much more. There is substantial value added at every stage of cycle – what is often called the Agribusiness Chain. Australia’s food manufacturing industry is worth $108.7 billion a year, nearly double the value of raw agricultural commodities. Food wholesaling has revenues of $97.3 billion, while retail is $137.5 billion. Add to that the whole range of agricultural products and services, from education to finance to agricultural machinery, and the industry is truly massive. There are also substantial amounts spent in such areas as packaging and transportation. Total Australian agricultural exports in 2016-17 are estimated at $44 billion. Some of this was raw product – such as live sheep and cattle, wheat and wool – and much of it had value added, such as processed dairy products.

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There are many sources of statistics on Australia’s agricultural industry. Both the Australian Bureau of Statistics (ABS) and the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) supply official data, and market research group IBISWorld takes this data further and provides forecasts and deeper analysis. The analysis below looks at estimates for the 2016-17 financial year. The numbers are constantly changing, with variable market and climatic conditions, but the data is as accurate a summation as can be made as to the size of the industry. It is a healthy and vibrant sector, contributing greatly to Australia’s domestic economy and export performance.

Commodities BROAD ACRE CROPS Australia’s most important crop is wheat, which comprised $6,880 million in 2016-17, or 11 per cent of the entire agriculture and fisheries market. Wheat is a winter crop in Australia – sowing starts in the Australian autumn, in March

TOTAL VALUE OF AUSTRALIA’S AGRICULTURAL & FISHERIES (2016-17 estimate, $m)

Other livestock $4,358 - 7.1%

Livestock product (eggs milk, etc.) $7,760 - 12.6%

Sheep & lambs $3,836 - 6.2% Fisheries and aquaculture $3,079 - 5.0%

Total Revenue $61,649 million Cattle & Calves $13,217 - 21.5% Cereals $10,163 - 16.5%

Oilseed $2,116 - 3.4% Horticulture & Other $2,965 - 4.8% Pulses $1,470 - 2.4% Vegetables $3,600 - 5.9%

Industrial crops $4,705 - 7.7%

Fruit & Nuts $4,200 - 6.8%

SOURCE: ABARES AND IBISWORLD

and April, with harvesting occurring in spring and summer towards the end of the calendar year, depending on seasonal conditions and location. All states except Tasmania produce wheat, with Western Australia’s wheat belt in the south west of that state the biggest producer and largest export region. Most of Australia’s wheat is exported, much of it after being milled into flour. The biggest markets are Indonesia, Japan, South Korea, Malaysia, Vietnam and Sudan. Wheat grown for domestic consumption and feedstock is predominately produced on the east coast. Other important broad acre crops are: n Cotton ($2,138 million) – Australia is a relatively minor producer of cotton globally but is the world’s second largest exporter. The major production areas are on the tributaries and the Darling and Murrumbidgee rivers in New South Wales, and in a band stretching into central Queensland. n Canola ($2,045 million) – Canola has been grown in Australia only since 1969 but has now become a major crop. Australia is well regarded for its high-quality canola exports and has developed some significant international markets, including Japan, China, Pakistan, Europe and Bangladesh. n Barley ($1,961 million) – Barley production is dispersed from southern Queensland through to Western Australia. Australia has a reputation for producing a reliable supply of high-quality, contaminant-free barley that is sought after by the malting, brewing, distilling and feed industries. One

third of the crop is malted and over half is exported. n Sugar cane ($1.767 million) – Sugar cane is Queensland’s most important agricultural crop, and is also grown on the New South Wales north coast. Over 80 per cent of Australia’s sugar production is exported. HORTICULTURE Australia’s horticultural industry comprises fruit, vegetables, nuts, flowers, turf and nursery products. Fruit and nuts account for $4,200 million and vegetables $3,600 million. Pulses (peas and peanuts) are a $1,470 million market, with fodder, turf and nurseries comprising a further $2,965 million. Australia has a strong reputation as a sustainable producer of premium fruit and vegetables. The industry comprises mainly small-scale family farms, but there is a growing trend towards medium to larger scale operations. The major horticulture growing areas in Australia are Victoria’s Goulburn Valley, the Murrumbidgee Irrigation Area in southern New South Wales and the Sunraysia and Riverland regions along the Murray River. There are also pockets in other areas, with Queensland vegetables typically supplying the southern states during the cooler June to October period. Banana, pineapple, mandarin, avocado, mango, tomato, capsicum and zucchini production is concentrated in Queensland. Stonefruit, oranges and grapes are grown mostly in New South Wales, Victoria and South Australia. Potatoes are widely grown in Tasmania; and pears, canning fruit and processing tomatoes in Victoria. Apples and fresh vegetables are grown in all states. There is also a large tropical fruit industry in northern Australia.

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TOP TEN COMMODITIES OVERALL (Gross value $m)

Cattle and Calves

$13,217

Wheat

$6,880

Milk

$3,914

Sheep & Lamb

$3,836

Wool

$2,957

Poultry

$2,789

Cotton

$2,138

Canola

$2,045

Barley

$1,961

Sugar Cane

$1,961

SOURCE: ABARES AND IBISWORLD

Tree nut crops grown throughout Australia include almonds, cashews, chestnuts, hazelnuts, macadamias, peanuts, pecans, pistachios and walnuts, while nursery and turf production generally occurs close to the capital cities. LIVESTOCK Cattle and calves are by far Australia’s largest agricultural commodity, with a gross value of $11,753 million (slaughtered stock) in 2016-17. Live cattle exports account for a further $1,464 million. Australia is one of the world’s most efficient producers of cattle and is the world’s largest exporter of beef. There are about 30 million head of cattle in Australia including three million head of dairy cattle. The cattle industry accounts for 58 per cent of all farms in Australia. In 2015-16, Australia exported 74 per cent of its total beef and veal pro-

duction to 84 countries, worth $8.5 billion. Queensland has the highest number of cattle. Sheep and lambs (slaughtered) are a $3,602 million market, with a further $234 million in live sheep exports. Australia is the world’s largest exporter of sheep meat and the second largest producer of lamb and mutton. Prime lamb producers are predominately located in the Riverina and southern and central New South Wales, the Murray region and the higher rainfall areas in south-west Victoria and eastern South Australia. Sheep are primarily located in south-west Western Australia, south western part of Victoria and the southern part of NSW. The poultry industry is worth $2,789 million, and pig meat $1,434 million. LIVESTOCK PRODUCTS Australia’s dairy farmers received $3,914 million for their milk in 2016-17. Victoria is the most important state, with two-thirds of Australia’s dairy farms and two-thirds of stock. Although Australia accounts for only two per cent of the world’s milk production, it is the fourth biggest exporter, with a six per cent share behind New Zealand, the European Union (as a bloc) and the US. Japan and China are the two biggest export markets. The wool industry is worth $2,937 million annually. Once Australia’s most important agricultural commodity, wool has declined in recent years, but still remains significant. Australia has the world’s most advanced wool industry and exports most of its production. Australia produced $786 million worth of eggs and $102 million worth of honey and beeswax in 2016-17. FISHERIES AND AQUACULTURE Fisheries, including aquaculture, were a $3,079 million industry in 2016-2017. The major products were rock lobsters and Queensland bugs ($792 million) and salmonids (salmon and trout – $774 million). Australia’s fishing zone is the world’s third largest, but the waters lack nutrients and have relatively low productivity. Australian fisheries exports are

THE AGRIBUSINESS CHAIN (Revenue 2016-17 Estimate)

Services to Agriculture

$5.9 billion

Agriculture (Inc. Fishing)

$61.5 billion

Imports

Education, Financial Services etc.

$19 billion

Manufacturing

Wholesaling

Retail

$108.7 billion

$97.3 billion

$137.5 billion

Packaging, Utilities, Transport etc.

Input-Output Chain Revenues

$493 billion

Hospitality & Institutional

$63.1 billion

Exports

$44 billion

SOURCE: ABARES AND IBISWORLD

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ages and bakeries are important, as are the processing of oils and fats. The food wholesale and distribution industry is worth $97.3 billion, which translates to $137.5 million at the retail level and is dominated by the Coles and Woolworths supermarket chains. Food sold through the hospitality industry – cafés and restaurants, pubs and hotels, fast food and catering – and served at institutions adds another $63.1 billion. Australia is a large food exporter, but it also imports $19 billion worth of food and agricultural products annually. Popular imports are alcoholic and non-alcoholic beverages, horticultural products, seafood and dairy (especially cheese).

AGRICULTURAL EXPORTS BY DESTINATION (Gross value $m)

China

$8,290

USA

$4,329

Japan

$3,992

Indonesia

$3,329

Korea

$2,602

European Union

$2,589

New Zealand

$1,568

Malaysia

$1,283

Vietnam

$1,227

Singapore

Exports

$1,083

Other

$11,801

SOURCE: ABARES AND IBISWORLD

TOP TEN AGRICULTURAL EXPORTS (Gross value $m)

Beef & veal

$7,520

Wheat & Wheat flour Wool

$5,115 $3,467

Sugar

$2,299

Lamb & Mutton

$2,241

Wine

$2,205

Barley & Malt Raw Cotton Canola Live Cattle

$1,919

Australian agricultural exports were worth $42.19 billion in 2015-16 (with an estimate of $44 billion for 2016-17). That is around two-thirds of the production value of the entire agricultural sector, but in many cases value has been added through processing before the product is exported (wheat into flour, barley into malt, canola into oil, milk into milk powder, grapes into wine, etc.) The biggest export commodity is beef and veal, at $7,250 million. Live cattle exports account for $1,464 million of this. Next most significant are wheat and wheat flour ($5,115 million) and wool ($3,467 million), followed by sugar ($2,299 million), lamb and mutton ($2,241 million) and wine ($2,205 million). Wine is a particularly good example of export value add – the total value of wine grape production in Australia is just $800 million, a fraction of the export value above. This is even more significant when you take into account that once turned into wine, most of it stays in Australia. Different commodities go to different markets, with China the largest export market by far. At $8,290 million, it accounts for nearly twice as much of Australia’s agricultural exports as the US ($4,329 million), which is Australia’s second largest market for agricultural exports. Next come Japan ($3,992 million), Indonesia ($3,329 million) and Korea ($2,602 million), indicating the supreme importance of Asian markets to Australia’s agricultural export performance.

$1,754 $1,565 $1,464

SOURCE: ABARES AND IBISWORLD

dominated by high-value product such as rock lobster, premium tuna species and abalone. Aquaculture is increasingly important, mostly salmonids in Tasmania and oysters in the south eastern states. Aquaculture comprises around half of Australian seafood production by value and 35 per cent by weight.

The Agribusiness Chain

ABOUT IBISWORLD: Melbourne based market analyst group IBISWorld is a major international source for business information, forecasting and strategic services. IBISWorld now operates in Australia, the US, Canada, China and the United Kingdom. IBISWorld was founded by Phil Ruthven in 1971. It provides data and insights on Australia’s 500 industries, its top 2,000 companies and its key business environment indicators. Mr Ruthven is widely considered to be one of Australia’s most respected strategists and futurists on business, social and economic matters. He contributes regularly to radio, TV, newspapers, magazines and documentaries on business, economic and social issues. In 2014, he became a Member of the Order of Australia in recognition of his significant service to business and commerce, and to the community.

Agribusiness does not stop at the farm gate. In fact, it has hardly begun. Direct services to agriculture, such as shearing, fruit picking, crop dusting and a host of other essential activities account for $5.9 billion. Food processing and manufacturing is a $108.7 billion business, with much of the final product exported. The manufacture of meat and dairy products are major Australian industries, as is sugar processing and the manufacture of confectionaries. Bever-

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13/INSIDE THE AUSTRALIAN AGRICULTURAL INDUSTRY

Dairy Cattle

Western Australia

Beef Cattle

Sheep Meat

Sheep Wool

Perth

Pigs

Goats

Buffalo

Poultry

Sources: Department of Agriculture and Water Resources, ABARES, and 1MG Research Qualification: Maps refer to the areas of highest concentration. Many animals and crops are also raised in lowest concentration areas and are not shown.

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arwin

Northern Territory Queensland

Brisbane

South Australia

New South Wales

Sydney elai Adelaide

Victoria Melbourne

Tasmania Hobart -355-

13/INSIDE THE AUSTRALIAN AGRICULTURAL INDUSTRY

Australian agricultural commodities - livestock Dairy cattle

Australia’s dairy industry produces 9,730 billion litres of milk a year, and accounts for six per cent of world dairy trade valued at $2.88 billion. Major markets for Australian dairy products are China, Japan, Singapore, Indonesia and Malaysia. Victoria is Australia’s largest dairy producer with over 65 per cent of national production and accounts for around 80 per cent of Australia’s dairy exports. The three main dairy regions in Victoria are Gippsland, Western Victoria and the Murray region. Dairy farming is the biggest contributor to the local economy (its farm, manufacturing and export industry accounts for up to $3 billion) in Gippsland, which is located in the south east of Victoria. While dairy farms are smaller in the Murray region compared to the national average, they have a higher level of productivity due to climate, reliable irrigation and proximity to grain growing regions for feed. The dominant breed in Australia is the Holstein (65 per cent of all dairy cattle), followed by the Jersey, Holstein-Jersey cross, Brown Swiss, Ayrshire and local breeds the Australian Red and the Illawarra.

Beef cattle

Cattle are raised across all states of Australia, covering an area that extends nearly half its continental landmass. Australia is a small producer of beef on the global scale (just four per cent) but is the third largest beef exporter in the world. Queensland is the nation’s largest producer and exporter of beef. It also boasts the largest Wagyu herd outside of Japan. The main beef producing regions are Fitzroy, Darling Downs, Northern Gulf and western outback. Located on the banks of the Fitzroy River is Rockhampton, commonly referred to as the Beef Capital of Australia. The historic city is home to heritage buildings and popular with tourists, handles the largest throughput of export cattle in the state and has the largest stud-selling venue in the Southern Hemisphere. Over 70 per cent of Australia’s total beef and veal production is exported ($9.4 billion) with major export markets including Japan, the US and Korea.

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Sheep meat

Australia is the world’s largest exporter of sheep meat and the second largest producer of lamb and mutton – its gross value is estimated at $3.3 billion. It is also the third- largest live sheep exporter in the world. Sheep that are farmed for meat are primarily located in the western regions of Victoria, eastern South Australia, the Murray region (which includes Victoria and New South Wales), south west Western Australia and the southern parts of New South Wales (the Riverina region is known as the wheat-sheep zone of New South Wales). Victoria is Australia’s largest lamb and mutton producing state, producing 44 per cent of Australia’s total lamb production and is one of the world’s largest suppliers of sheep meat. In 2015-16, Australia exported 91 per cent of its mutton and 56 per cent of its lamb. Main export markets are the US, China, United Arab Emirates and Saudi Arabia.

Wool

Australia is one of the world’s largest wool producers, producing around a quarter of greasy wool sold on the world market. Australian woolgrowers are known internationally for their high-quality and reliable source of natural fibre. The state of New South Wales alone produces nine per cent of the world wool production, with most farms (36 per cent of the national flock) located in the central west of the state. The relatively mild climate and pastoral lands surrounding Goulburn make it ideal for breeding wool-producing sheep – it is fittingly also the home of the ‘Big Merino’, the world’s largest merino ram sculpture. Other high wool producing states are Western Australia and Victoria. The Australian Merino accounts for 75 per cent of all sheep bred for wool in Australia, which is a cross from different breeds originating from Europe (Spain and Saxony). Valued at over three billion, the top export markets for Australian wool are China, India and Italy.

Pigs

Australia’s pig industry has a farmgate value of just over $1 billion. Australia’s pig herd health is one of the best in the world and the country’s pork farmers are the first in the world to have made a commitment to phase out sow stalls by 2017. In addition, numerous pig producers are trying to be more sustainable, and are using pig manure to generate electricity to power entire farms. New South Wales is the largest producer and exporter of pork products in Australia. As feed is the major cost when producing pork, most farms are located in the central western and southern grain producing regions of the state. Queensland has approximately 22 per cent of the nation’s pig herd, located at the Darling Downs and Wide Bay regions while the state of Victoria accounts for 18 per cent, with pig herds mostly concentrated in the north-western region of the state. On the banks of Victoria’s Murray River in the town of Corowa is the largest piggery in the Southern Hemisphere and the largest pig slaughterhouse in Australia. The Corowa district played a significant role in Australia’s history, having been the site where negotiations were held for the creation of the Federation of Australia in 1901. Only a small percentage of the country’s pig meat production is exported, with roughly 87 per cent produced for domestic consumption. Australian pork and pork products are exported to countries such as Singapore, New Zealand and Hong Kong.

Goat meat

Goat meat is the most widely consumed meat in the world. Although Australia only produces 0.5 per cent of the world’s supply, it is actually the largest exporter of goat meat ($250 million) representing over half of the world’s exports. The two largest markets for Australian goat meat are the US and Taiwan. Victoria and Queensland are the two major goat meat producers in Australia. Just over half of Victoria’s goat production (55 per cent) takes place in the Gippsland, East Gippsland and Goulburn regions. A smaller percentage (22 per cent) occurs near outer Melbourne and in Barwon. Australian bush goats and Boer goats are used for meat production, while

cashmere and angora goats are used for fibre. Australian bush goats (also known as rangeland goats) were wild goats that effectively adjusted to the isolated environment of Australia’s rangelands, which are less accessible areas that see higher rainfall. They account for 90 per cent of Australia’s total goat meat production. Australia also exports live goats, and these are mostly bred in South Australia and New South Wales – major export markets include Malaysia, United Arab Emirates and Brunei.

Buffalo

Buffalo were first introduced to Australia in the 19th century, when Swamp Buffalo were brought to Melville Island and Cobourg Peninsula in the Northern Territory for meat. They adapted well to the conditions in the Top End of the state, so much so that when the settlements were abandoned, feral buffalo became a problem for the state. Feral buffalo has supported many industries, from meat for human consumption (some Aboriginal communities depend on buffalo as a food source, particularly in Kakadu) to pet meat, hides and horns, as well as live animal exports. Live Australian buffalo have been exported to Brunei, Indonesia and Malaysia. Buffalo are now raised in every state of Australia and while Northern Territory has the largest number of buffalo herds, it is the state of Victoria that has carved a reputation for the industry – the Australian buffalo milk and cheese industry began in Victoria, when Riverine Buffalo were imported from Italy and Bulgaria to the town of Camperdown in the mid-1990s. A factory in Yambuk was established to process the milk, with the herd eventually moved to the banks of the Shaw River. Today, the Shaw River herd remains the largest and only 100 per cent pure Riverine Buffalo herd in Australia. Other notable dairy buffalo farms include Millaa Millaa and Maleny in Queensland and Beatrice Hill in the Northern Territory. There has been a growing local demand for buffalo milk food products, which range from soft, Italian-style buffalo mozzarella to feta, hard cheese, natural yoghurt and ice cream.

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Poultry (chicken meat and eggs)

Australia’s poultry production averages 857,000 tonnes annually, with consumers currently spending an estimated $5.6 billion a year on chicken meat in supermarkets, restaurants and fast food outlets. Australia’s chicken layer (egg) industry has a farm gate value of $625 million, producing almost 5 billion eggs per year. Both industries are well developed across the country, with New South Wales, Victoria and Queensland being the biggest producers of both chicken meat and eggs. The major areas for farming chicken meat in New South Wales – the highest producer nationwide – are located in the outskirts of the Sydney Metropolitan area, Mangrove Mountain/Central Coast, Newcastle, Tamworth, Griffith and Byron Bay. Two of the largest integrated meat-processing companies (Inghams and Baiada) are headquartered in New South Wales – together, they supply over 70 per cent of Australia’s chicken meat. In Victoria, farms are located around the areas of Mornington Peninsula, Geelong and Bendigo; while in Queensland, the Redland Bay region south of Brisbane and Mareeba are the highest chicken meat producing regions. Due to high local demand, only a small percentage of Australian chicken meat is exported, with international markets including Hong Kong, Singapore, South Africa, Philippines and South Pacific islands.

Kangaroo meat

The Australian kangaroo industry annually exports about 4000 tonnes of kangaroo meat to over 60 countries worldwide. Just three per cent of the total kangaroo population (over 50 million nationwide) is used for meat. There is no farming of kangaroos in Australia; instead they are harvested in their own environment, in the open rangelands. The Australian government closely monitors the commercial harvest of kangaroos, setting strict quotas depending on their numbers. The commercial kangaroo industry began fairly recently in 1959, and is considered one of the best wild harvest operations in the world. Only four species of kangaroos are allowed to be harvested for commercial use, including the export of kangaroo products – they are the red kangaroo, eastern grey kangaroo, western grey kangaroo and common wallaroo. The only states allowed to do so are Queensland, New South Wales, South Australia and Western Australia.

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Highly nutritious – particularly rich in protein and low in fat – kangaroo meat has been consumed by Indigenous Australians for over 40,000 years, since their arrival on the continent. Kangaroo meat is consumed in the same manner as any other traditional meat and can be commonly found in supermarkets across Australia in meat patties, sausages and jerky. One of the most lightweight leathers, kangaroo leather is also durable and is used to produce high-quality wallets, handbags, belt and boots.

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13/INSIDE THE AUSTRALIAN AGRICULTURAL INDUSTRY

Australian agricultural commodities - crops Wheat

Wheat is Australia’s largest grain production and is one of the three main winter crops grown in Australia. Australia produces about 24 million tonnes of wheat a year, accounting for 3.5 per cent of annual global production and 10-15 per cent of the world’s 100 million tonne annual global wheat trade. Wheat is predominantly grown throughout the southern and eastern regions of the country, in a crescent known as the ‘wheatbelt’, which stretches from Central Queensland to New South Wales and Victoria, through to South Australia and into the south west of Western Australia. The majority of wheat grown in Australia is sold overseas to major export markets in Asia and the Middle East, including Indonesia, Japan, South Korea, Iran and Yemen. Western Australia produces about half of Australia’s total wheat production – 8-10 million tonnes annually – and is the largest exporting state of wheat, with more than 95 per cent of its production exported. The state is also the world’s major wheat supplier for Japanese white salted udon noodles, amounting annually to a one million tonne market. The various different types of wheat produced in Australia include prime hard, hard, premium white, standard, soft and durum. Australian wheat is used worldwide in a range of food products, from all types of Asian noodles (including ramen and instant noodles) to bread, pastry, pasta and cous cous.

Pulses

Australia produces an average of 2.2 million tonnes of pulses a year, with Western Australia, New South Wales and South Australia the leading producers. The commercial production of pulses in Australia began with navy beans in Kingaroy, Queensland to help feed the US troops during World War Two. Queensland is also where the production of chickpeas and mung beans began, in the 1970s. Nationally, pulses amount to just under ten per cent of the total area planted to crop. They include the Australian white lupin (30-40 per cent), chickpeas (20-35 per cent), lentils (10-15 per cent), faba and broad beans (1015 per cent), field peas (10-15 per cent) and mung beans (5 per cent). Australia exports more than half of its annual production of pulses worth up to $1.2 billion to markets in Asia, the Middle East and Europe, with the majority of the exported grain used for human consumption. The four largest export markets are India, Malaysia, Pakistan and Philippines.

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Canola

Canola production in Australia averages about 3.4 million tonnes annually and is steadily increasing. Representing more than half of Australian oilseed production, both conventional and genetically-modified canola varieties are grown in Australia. Canola is grown in the higher rainfall regions of Australia’s wheatbelt, predominantly from the south west of Western Australia to northern New South Wales. Western Australia is the dominant state for canola production, representing about 40 per cent of Australia’s total production. Canola production in Australia makes up to 15-20 per cent of world export trade, amounting to $1.7 billion. It is exported to international markets including Europe, China, Pakistan and Japan where its uses range from food-grade oil to biofuel production and stock feed.

Barley

The second-largest crop production in Australia after wheat, Australian barley is recognised internationally for its excellent malt and feed qualities. Australia produces two-row spring barley that result in harvested grains with low moisture content and long storage viability. About eight million tonnes of barley is produced each year, grown over four million hectares across Australia from the south of Queensland through to Western Australia. Western Australia has the largest barley malting facility in the southern hemisphere, and between two of the state’s local malting plants over 250,000 tonnes of barley is processed each year. Approximately 60 per cent of Australia’s total barley production is exported; more than 40 per cent of the world’s malting barley trade and 20 per cent of the feed barley trade comes from Australia. A leading supplier to China, Australia exports about 60 per cent of the Chinese malting barley requirement, accounting for close to 3 million tonnes a year. Exported Australian barley is mainly used in the beer brewing industry and for animal feed. It is also used in the making of shochu, whisky, malt extract and breakfast cereals.

Oats

An average of 1.3 million tonnes of oat grain is produced in Australia each year. The production of oats is dispersed from south Western Australia to the lower Eyre and Yorke Peninsulas of South Australia, through to western and northeastern Victoria, up to the Riverina region and central New South Wales and into Central Queensland. Western Australian oats have a national and international reputation for high quality and milling properties – half of the state’s production of milling oats is exported and it produces 40 per cent of the country’s export hay. Oats

Darwin

Northern Territory

Queensland Western Australia Brisbane

South Australia

Perth

New South Wales Sydney Adelaide

Melbourne

Victoria Canola

Oats

Pulses

Sorghum

Cotton

Barley

Wheat

Rice

Tasmania Hobart

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grown in the state are screened by the state’s agriculture department and are chosen to suit the climate, are disease resistant and have very specific agronomic traits. The main export markets for Australian oats include China, Mexico, UAE, India and South Africa. There has been a growing interest for Australian milled oats from Asia – specifically, from China – where oats have been recognised for their nutritional benefits and are being used in the production of food staples such as noodles, rice, milk and health care products.

Sorghum

Sorghum is produced predominantly in the northeast of Australia; about 60 per cent in Queensland and the remainder in northern New South Wales. The highest yields of sorghum are in the slightly cooler regions, Warwick (Queensland) and Quirindi (New South Wales). Success in the scientific field for genetically modified sorghum varieties has seen the grain become one of Australia’s most valuable cereal crops. Australia’s sorghum production is used mostly for animal feed – in particular for cattle, pigs and poultry – and as feedstock for biofuel production. More recently, sorghum is being used for human consumption – where it has gained popularity due to its gluten-free nature – and used for alcohol production in China. Australia produces just over 2.5 per cent of the world’s sorghum, but accounts for over 5 per cent of global exports.

Rice

The Australian rice industry generates approximately $800 million in revenue each year. About 85 per cent of Australia’s rice production is exported, to more than 60 international destinations in Asia, North America and the Middle East. Australia’s rice production is located along the Murrumbidgee valleys of New South Wales and the Murray valleys of New South Wales and northern Victoria. Home to a multitude of wetlands and swamps, the Murrumbidgee catchment itself accounts for half of Australia’s rice production – aptly named, the word ‘murrumbidgee’ means ‘big water’ in the local Aboriginal dialect. Eleven varieties of rice are grown in Australia, all of which are specifically bred to suit the climate. A world leader in water use efficiency, the Australian rice industry uses up to 50 per cent less water than the global average. Most of the rice produced in Australia is of the medium grain variety (at least 80 per cent). Grown exclusively for the Japanese market, Australia also produces shorter grain varieties – in particular, Koshihikari – which are used in making sushi.

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Cotton

Cotton is grown in the inland regions of New South Wales and southern Queensland. Most of the cotton farms in New South Wales are located around the Gwydir, Namoi and Macquarie valleys. Cotton is also grown along the Barwon and Darling rivers in the west and the Lachlan and Murrumbidgee rivers in the south of New South Wales. In Queensland, cotton is mostly cultivated in the Darling Downs, St George, Dirranbandi and Macintyre Valley regions close to the south. There are also some cotton farms located in Central Queensland, around Emerald, Theodore and Biloela. Australian cotton growers are internationally recognised as the most water-use efficient in the world. In addition, advances in the local scientific field and biotechnology have reduced pesticide use by more than 85 per cent. Australia is one of the largest exporters of raw cotton despite producing just three per cent on the global scale. More than 90 per cent of Australia’s cotton production is exported, mainly to Asia. China leads as the largest importer of Australian cotton (68 per cent), followed by Indonesia and Thailand.

VEGETABLES AND FRUIT Celery

Celery is grown all across Australia in Victoria, New South Wales, Queensland, Western Australia and South Australia. Producing 25,000 tonnes a year in the Melbourne Metro area, Victoria is the top celery producing state in Australia. Most of the production is located towards the south of Cranbourne, a region an hour’s drive from Melbourne’s centre and which was historically a swampland prior to settlement. In other parts of Australia, celery is grown on the fringes of the state capitals: in the Hunter Valley and Sydney Basin in New South Wales; Lockyer and Fassifern valleys and Darling Downs in Queensland; Perth Metro outer region in Western Australia; and Adelaide Plains in South Australia. Malaysia is the largest export market for Australia’s celery production, comprising close to 50 per cent of the country’s total celery exports, closely followed by Singapore (35.4 per cent). Other export markets include the United Arab Emirates, Papua New Guinea and Indonesia.

Onions

Australia’s fourth largest vegetable crop, onions account for nine per cent of the country’s total vegetable production, valued at $160 million a year. While all states produce considerable volumes of onions, South Australia and Tasmania combine to contribute a significant 70 per cent of the market. Two-thirds of the onions grown for domestic consumption are produced

Darwin

Northern Territory Queensland Western Australia Brisbane

South Australia New South Wales

Perth

Sydney Adelaide

Melbourne

Victoria Celery

Bananas

Potatos

Oranges

Table Grapes

Sugar Cane

Apples

Mushrooms

Melons

Wine Grapes

Tasmania Hobart

Onions

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in South Australia, with almost half of Australia’s total volume produced in the Adelaide Plains, the River Murray and upper and lower south eastern regions (Bordertown and Mount Gambier). Most of the onions exported from Australia are produced in Tasmania – 85 per cent of Tasmania’s onion crop is produced for export markets. One of the main onion producing areas in Tasmania is Devonport, a region known for its basaltic soils that are highly rich in iron and ideal for cultivating onions.

Potatoes

Australia is one of only two countries in the world that is able to produce potatoes throughout the year due to its geographical diversity. Potatoes account for 20 per cent of Australia’s total vegetable production with 1.25 million tonnes produced annually (worth $614 million). Potatoes are produced all around Australia with the exception of the far northern areas where temperatures exceed growing conditions for the cool-season crop. The potato is considered the backbone of Tasmania’s vegetable industry; it accounts for 70 per cent of the state’s total vegetable production value and is the highest value vegetable produced in the state (with a farm gate value of approximately $82.5 million). Despite this, South Australia is the largest potato producer in Australia, supplying 80 per cent of the country’s fresh washed potatoes. The main growing regions include the Murraylands and Riverland along the River Murray and Limestone Coast.

Melons

Australia grows over 200,000 tonnes of melons each year. The main types of melons produced in Australia are rockmelons, honeydew melons and watermelons. Queensland is the leading melon producer in Australia, growing 30 per cent of the nation’s rockmelons and almost all of the country’s honeydew melons. Queensland’s melon production is distributed between the Bowen-Burdekin (dry tropics) area and the Bundaberg-Burnett and Chinchilla-St George regions. Located in Queensland’s Darling Downs region, Chinchilla is also known as the ‘Melon Capital of Australia’: it produces a quarter of all Australia’s watermelons and even plays host to a four-day melon festival held biennially. The Northern Territory, Western Australia and New South Wales produce the remaining bulk of Australia’s melon production. Australian melons are grown both for domestic consumption and international export. About 85 per cent of exported melons go to New Zealand, United Arab Emirates and Singapore, and watermelons make up a quarter of this trade. A new trade agreement eliminating tariffs on watermelons with Japan in 2016 has opened a new market for Australian melon producers, with other melon tariffs due to disappear in 2019.

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Bananas

The Australian banana industry contributes $1.1 billion each year to the Australian economy. The top-selling supermarket product in Australia, over five million bananas are consumed daily in Australia, with current annual production at 372,000 tonnes. Chinese migrant communities attracted to North Queensland by goldmines in the late 1800s introduced the first bananas to Australia. Today, North Queensland produces 95 per cent (236,000 tonnes) of Australia’s banana production, mainly in the Cassowary Coast Region south of Cairns. The most productive areas include Tully, Innisfail and Kennedy. Bananas are also grown in the Atherton Tablelands west of Cairns and in Mossman, Lakeland Downs and Hopevale north of Cairns. The mix of rainforest, wetlands and savannah creates the ideal tropical conditions needed for the successful cultivation of bananas. The remaining five per cent of Australia’s banana production is grown in South East Queensland, northern New South Wales, Western Australia and the Northern Territory.

Mushrooms

Mushrooms are the sixth most valuable horticulture crop grown in Australia. The first commercial mushrooms were grown in disused railway tunnels under Sydney in 1933 – including the incomplete Circular Quay to St James line. In the late 1930s commercial mushroom farming moved to the Hawkesbury district where 30 per cent of the nation’s mushrooms are produced today. Today, a high percentage of mushrooms are cultivated in Victoria, particularly in Mernda in the Greater Melbourne region. Named after the local Aboriginal word meaning ‘earth’ in English, Mernda is home to the largest mushroom farm in the Southern Hemisphere. The major export markets of Australian mushrooms include the US, France and Japan.

Table grapes

The founder of the New South Wales colony, Captain Arthur Phillip, introduced grapes to Australia in 1788. Australia’s warm and dry summers combined with its rich and deep soils provide an excellent environment for world-class table grapes. The Australian table grape industry produces an average of 120,000 tonnes annually, valued at $330 million. A strong demand for Australian grapes from Asia has made it one of the highest valued horticultural export products in the country, and approximately 65 per cent of table grapes grown in Australia are exported. Major export markets include Hong Kong, Indonesia, Singapore, China and Thailand. The main growing regions for table grapes are Sunraysia in Victoria and South Eastern Queensland. Other regions include Carnarvon and the Swan Valley in Western Australia, Riverina in central New South Wales, South Australian Riverland and central Northern Territory.

Oranges

The Australian citrus industry (which in addition to oranges includes lemons, limes, grapefruit and mandarins) is the largest fresh fruit exporter in Australia, worth over $200 million annually. In Australia’s southern growing regions, hot, dry summers and cool winters encourage excellent orange fruit growth and colour. The Riverina region, around the districts of Griffith, Leeton and Hillson in New South Wales, is the largest orange producer in Australia. Because of Australia’s clean environment, premium quality and counter-seasonality production, there is a growing demand for Australian oranges from Asia. Oranges account for about 80 per cent of Australian citrus exports, with major export markets in China, Japan, Korea and Thailand.

Wine grapes

Australia’s wine industry is considered young, but in just 200 years it has grown into an industry renowned worldwide for quality, depth and innovation. As different climates and soil types can be found all over the country, Australia is one of the very few countries that is able to produce all of the major types of wine, from red wines to white wines, fortified wines, sweet wines and sparkling wines. Australia also has some of the oldest grape vines in the world – many of Europe’s established vineyards were destroyed by disease in the 1800s, with the only survivors being the vines that were exported to Australia. The history of Australia’s wine industry can be traced back to 1791 when grapes were imported from Europe and successfully cultivated in Sydney in the Governor’s garden, what is now known as Sydney’s Macquarie Street. The first commercial vineyard was located in the coastal region around Sydney at Camden Park. More European varieties were brought to Sydney and planted in the Botanical Gardens in the early 1800s – a duplicate collection of these vines were planted in Hunter Valley, with subsequent cuttings making their way across New South Wales, Victoria and South Australia. The main wine producing regions are in the cooler south east of the country. Most of Australia’s wine is produced in South Australia (Barossa Valley, Clare Valley, Coonawarra), Victoria (Swan Hill, Yarra Valley, Rutherglen) and New South Wales (Hunter Valley, Mudgee, Riverina). South Australia is the most important wine producing state – responsible for almost half of Australia’s annual wine production – and home to some of the oldest vines in the country. Despite being the driest state in Australia, South Australia benefits from the Murray River crossing the state. The different soil types and climatic conditions allow a wide range of wine styles to be cultivated. Due to its cool conditions, the state of Tasmania has produced many of Australia’s best and award-winning wines, while Victoria – which was once Australia’s largest wine producing state – is known for producing virtually every wine style thanks to its diverse regional climate. Well-recognised wines are also grown in Queensland (South Burnett and Stanthorpe) and south west Western Australia (Margaret River, Swan District). Australian wines are now exported to over 100 countries and have gained

international acclaim at major international wine competitions, with some local labels having set records for price of a single bottle.

Sugar cane

Established in the 1860s, the Australian sugar cane industry is one of the world’s most innovative and efficient producers and exporters of sugar, noted for its cutting-edge technology (the world’s first mechanical cane harvester was built in Bundaberg, Queensland) and sustainable farming. Over 30 million tonnes of cane is produced in Australia each year, with a value of $2 billion. It is the seventh largest agricultural export in Australia (and the second-largest export crop after wheat), with 80 per cent of the country’s production exported to markets in East Asia, China, Indonesia, Korea, Malaysia and Taiwan. Australia is in fact the third-largest raw sugar supplier in the world. The sugarcane industry is located along Australia’s eastern coastline, from Mossman (far north Queensland) to Grafton in New South Wales, with the top producing regions being the Atherton Tablelands, Burdekin, Bundaberg, Tully and Mackay. Queensland dominates Australia’s sugar production and exports, accounting for 95 per cent of the country’s total production, of which 80 per cent is exported. Domestic consumption is mainly produced in northern New South Wales.

Apples

The Australian apple industry is valued at nearly $556 million. Combined with the pear industry, it is the highest value fruit industry in Australia. Victoria contributes almost half of Australia’s total apple production. The main apple varieties grown in Victoria are Granny Smith, Gala, Cripps Pink and Cripps Red. Rich, fertile soils, cool winter nights and irrigation systems in the Goulburn Valley around the area of Shepparton make it ideal as the largest producing region of apples and pears in Australia, accounting for almost 70 per cent of Victoria’s apple production. Shepparton is also home to one of the world’s largest fruit canneries, the SPC Ardmona plant, which was established in 1917. Known internationally as the Apple Isle, it is Tasmania that has the longest history of apple production in Australia. The first apple tree was planted in Tasmania in the 1700s and it was among the first crops introduced by early settlers. Approximately 30-35 per cent of Tasmania’s total apple crop is exported and it accounts for 65 per cent of total Australian exports. Tasmania’s fruit-fly-free status and pristine climate has made its crops extremely desirable to export markets, in particular the Chinese market. Other export markets include Taiwan, Singapore, Malaysia and the Philippines.

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Leaders Speak In researching and creating Boundless Plains to Share we have been lucky enough to cross paths with many leaders in agribusiness and agriculture, and have them share their thoughts on a variety of topics with us. These leaders come from all walks of life, from politicians and CEOs of major companies to farmers and entrepreneurs. When we spoke with them, their insightful and occasionally controversial statements inspired our thoughts and work. These are their words.

“We Australians have a vast array of powerful stories to tell about our food products, and a deeply interested audience. The question is whether we do it often and well enough. When we took a group of abalone suppliers to China it was essentially an enlarged story telling session, along with hospitality and great interaction – it was a huge success. What’s exciting today is that we have social and digital media tools to extend our story telling – our hospitality, so to speak. Are we doing that enough? Our SMEs in particular have much to gain.”

“The Chinese belief in our Australian provenance is very strong, but we cannot rest on our laurels. They want culinary excitement, something new but in tune with their own palates, a product with an element of familiarity. This is important for any food exporter to China to consider, along with Chinese preferences for packaging – an area too often overlooked. In our case, we interviewed for several years before finding the right distributor. That’s another essential: identifying someone who really understands your product and market.”

The Hon. Bruce Billson MP, Federal Member for Dunkley and former Minister for Small Business

Maggie Beer, Australian culinary icon and gourmet food manufacturer

“Australia is NOT limited by the productive capacity of its land. We are only limited by our own lack of creativity – in building partnerships, extending education and by adopting the attitude it is not about taking advantage of Asia, but contributing to their growth. We should be contributing and becoming part of the vast Asian nutrition change.”

“One of my first great discoveries on arriving from France years ago was the quality of the products. In most cases they are superior to what I was able to work with in France.”

Chris Rees, Senior Trade Commissioner Singapore, Austrade

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Jacques Reymond, award-winning Melbourne chef, formerly sous chef at Oustau de la Baumaniere, a three-star Michelin restaurant in France

“Australian agribusiness companies have the opportunity to arrest and even reverse many negative impacts on our natural environment. Embracing environmentally responsible principles and practices can come at some financial cost, but this is minor compared to the long term consequences for our unique and vital biodiversity. We need to integrate our agribusiness ideology with the Australian landscape and its natural forces, the way Australian indigenous cultures have for millennia, in order to safeguard our unique fauna and flora for generations to come.” Anthony Hotson, Managing Director of Rainforest Foods

“At James Cook University we recognise that the University is judged not only on its quality but equally on its wider relevance, impact and the force and integrity of its intellectual leadership. From our location in the tropics, we seek to develop relationships with research organisations, employers and users of new knowledge wherever they may be around the world. As a regionally-based university, we recognise our obligation to engage with industry, government and the community and to share our research findings.” Professor Chris Cocklin, Senior Deputy Vice Chancellor of James Cook University

“You really are seeing the stars align in a way they’ve never aligned before in Australia’s beef market. Most demand indicators are at their peak or close to a record high – whether it be domestic markets, traditional international markets for boxed beef or for live cattle, they’re all at or near a peak and that’s obviously driving the livestock price.” Hamish Browning, Managing Director of Frontier International Agri

“I think a lot about Australia and where we are headed. Business in Australia is mostly doing quite well, but we seem to have lost some of our traditions, including quality and manufacturing. I wonder if some of our policies aren’t impacting on our own manufacturing capabilities. We have unsustainable national debt that isn’t being addressed, high imports of food, crumbling infrastructure in road and rail, a lack of water and some of the highest operating costs in the OECD. This makes us relatively uncompetitive on a world stage. Are we thinking enough about our future, from all angles? Are we asking the right questions? Are we losing perspective because of the ‘expected’ China and Asia food boom?” Chris Cummins, Managing Director of Breakout River

“Sadly for too long a “silo mentality” has grown within various levels of Australian government and into far too many agricultural regulatory structures. One example of this is the three official data bases that are incompatible and stuffing up efficiencies with EU cattle accreditation and just about everything else for our busy cattle producers.” Tim Fischer AC, farmer, author and former Deputy Prime Minister of Australia

“For Australian agribusiness to prosper both domestically and with Asian exports, a fierce devotion to understanding the customer’s needs and the levers that drive their purchasing is required. Armed with this information, we can then make informed decisions regarding variety selection, quality, production, pack size and presentation. Most importantly, this customer focus should inspire us all to succeed in a very competitive export market.” Mark Pye, Managing Director of Zerella Fresh

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“Australia’s agribusiness industry is in an unprecedented position to achieve great things in coming decades – not just for the nation, but for much of humanity. Our unique attributes and capabilities provide the opportunity to promote public health for all citizens by giving them access to clean and nutritious foods, and to promote food safety by using technology to prevent food fraud and counterfeiting. What’s lacking now is marketing cohesion. The whole agribusiness community must create and present a single and coherent face to the world for showcasing, education, engagement and inspiration for an immense global consumer population. For us to really capitalise on our assets and create a competitive edge, we need to communicate with a unified voice and brand: Brand Australia.”

“As an executive who has worked in Australia and Hong Kong for many years, it’s clear to me that Australia has some very key advantages in the Asia region – especially in China. It goes without saying that the reputation for quality food is reasonably well established, and growing stronger as the market develops. But there is much more behind Australia’s position of opportunity. Over the past decade, more and more Australian executives in Hong Kong have risen to CEO or Board level here. The Australian expat community in Hong Kong is now 90,000. This has multiple benefits – both in terms of image and respect – but more tangibly in the positive mindset this experience has created in Asian nationals educated in Australia, now working back home. You can call that soft power.” Clement Chan, Managing Director of BDO Hong Kong

Dr Roger Sexton AM, Chairman of Beston Global Food Company

“Australia’s potential to seize the lucrative commercial opportunities from exporting food to the growing Asian middle class is well documented. We have proven and premium food brands and products and are confronted by a huge foreign market with an appetite for quality. We are, however, currently behind the eight-ball compared with other agribusiness economies, especially New Zealand. A robust export model that supports Australian SME food manufacturing companies with serious export ambitions is now needed to realise this emerging food boom.” Allan Hood, CEO of Bulla Family Dairy

“Much of Asia’s population has limited access to free public health care. The rising middle class masses are therefore increasingly motivated to embrace judicious eating habits given diet is the primary determinant of well-being and longevity in these cultures. Australia is in a position to gain significant benefit by responding to this growing demand for our healthy and safe food products. The diligent marketing of arguably Australia’s greatest export commodity – food provenance – must be a major part of our strategy if we are to reach these consumers and benefit from their desire to consume healthy food. We must also ensure our natural competitive advantage is not undermined by enemies to export, such as the onerous and costly logistics processes and export regulations.” Lisa Rowntree, Managing Director of Longridge OIives and CEO of the Australian Olive Association

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“The Australian food industry has to leverage its natural competitive advantages in order to be long term players in the global food market, especially in the eyes of Asia’s rising middle class where provenance is paramount. Native Australian ingredients and innovative and sustainable farming practices are key development drivers for value adding Australian producers and brands. We must embrace what is unique to Australia to continue delivering and exporting superior quality products with nutritional integrity and authentic Australian taste to the world.” Sam Tucker, Managing Director Tucker’s Natural

“The momentum of organic food in Australian culinary culture in recent years is driven by an increasingly health and ethics focused approach to food. Both the practice of organic sustainable farming and Australia as a brand speak to these priorities. Australia is known to global consumers for premium quality and pure produce, and the ‘certified organic’ label adds to this a further promise of transparency and integrity all the way from paddock to plate. The organic food movement can only gain strength as more consumers embrace the concept that healthful organic food is the ultimate commodity in our lives.” Chalimah Jeanne, Founder of Organic Merchant

“Globally, we need strategies and action across all levels of business that display a more ethical approach. This is especially true of farms and food production businesses, and centres on three areas: Ethical manufacturing can reduce unnecessary impacts on the environment; ethical food production can minimise processing and remove GMOs and artificial elements; while ethical employment utilises a local workforce and supports families to ensure a healthy lifestyle. Ideally, these areas should represent an aspired standard for all manufacturing companies, especially food producers, for the benefit of all humanity.”

“Gone are the days when Australian dairy manufacturing companies only had to worry about delivering consumers a quality product and optimising their margins. The cornerstone of modern commercial success and organisational longevity is a dynamic company strategy that focuses firstly on all the parts, people and processes in the whole supply chain, and secondly on developing a point of difference. For the latter, a substantive and innovative capability in corporate social responsibility – especially the company’s impact on its suppliers – is emerging as the key pillar of the ideal business model.”

Ulli Spranz, Managing Director of B.-d. Farm Paris Creek

Brett Kelly, CEO of Norco

“After many years of running top steak houses in Asia, I have no hesitation in saying that Australian Wagyu beef is superior to the Japanese product.” William Ling, Chef

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Published by One Mandate Group, Sydney, Australia. www.onemandate.com ÂŠ One Mandate Group, 2017. One Mandate Media Group Pty Ltd CEO Audrey Murugasu + 61 2 9884 9660 solutions@onemandate.com www.onemandate.com National Library of Australia Cataloguing-in-Publication entry: Title: Boundless Plains to Share / edited by Keiron Costello. ISBN: 9780646966366 (paperback) Subjects: Agricultural industries--Australia--History Agricultural innovations--Australia--History. Other Creators/Contributors: Costello, Keiron, editor. One Mandate Group, issuing body. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any other information storage and retrieval system, without the written permission of One Mandate Group.

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OVER 70 AUTHORS INCLUDING A FOREWORD BY THE HON. BARNABY JOYCE, DEPUTY PRIME MINISTER AND MINISTER FOR AGRICULTURE AND WATER RESOURCES. TOPICS INCLUDE: •

Australia in the Asian century

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The big questions facing Australian agriculture

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A special series of Asian opinions on Australian agriculture

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New science and technology in agriculture and food production

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Brand and marketing debates in Australia

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The critical role of soil health and management

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Biosecurity and its imperatives

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The anti-GM food debate

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Profiles of innovative new food companies and products

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The role of state and federal governments in fostering innovation

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Key institutes and their work

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Growth of the organic food industry

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Maps and commentary on Australia’s areas of agricultural strength

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The rise of agricultural funds and investment

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High points of Australian innovation and scientific research

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Interviews with agribusiness leaders

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Little-known histories of veterinary science’s successful fight against epidemics

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Sustainability practices in agriculture

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Boundless Plains to Share is the broadest contemporary compendium ever published on Australian agriculture and agribusiness. It provides an expansive outlook on the burgeoning food trade with Asia, and also charts future opportunities and challenges. Boundless Plains to Share is a visual and ideas feast, designed to be enjoyed by a wide range of readers from business professionals to farmers, students, scientists, specialists and the general public. Anyone curious as to what the food business and agricultural industry are all about â&#x20AC;&#x201C; and how Australia leads the world in many areas within this wide sector â&#x20AC;&#x201C; will find this book a compelling and rewarding read.

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