Market to 31,280 farmer members and get higher indexing through the search engines.

Ag News

AFI - Is the NFF's 100 billion by 2030 target right?

  • By: "Prime" Ag News
  • Feb 14, 2018

The National Farmers’ Federation (NFF) recently held its first meeting with the new Agriculture and Water Resources Minister, David Littleproud. In this meeting the NFF emphasised the goal for agriculture to be a $100 billion industry by 2030. That target would require another $30 billion to be added to the value of agriculture (including forestry and fisheries) over the next 13 years, a significant growth in output and one that is not going to happen by accident.

The NFF is to be commended for attempting to galvanise the agricultural sector around a growth target that requires the sector to work together. Big, bold targets that provide focus, drive and purpose for an industry lead to innovation and inspiration. Just as John F Kennedy’s aspirational target of putting a man on the moon provided a focal point for all those involved in the broad array of activities needed to achieve that objective, so commitment to an aspirational goal for the agriculture sector could provide a focal point for the broad array of initiatives that may be required to achieve it.

So is $100 billion a truly ambitious target that will stretch the sector and demand innovation and new thinking?

Over the past 20 years the value of agricultural output has grown at just over 4% per year. When that growth rate is projected out to 2030 (starting from the ABARES 2017-18 forecast) we can see that Australian agricultural output should be around $105 billion in today’s dollars.

Figure 1: Agricultural commodities and trade data figures 1997-98 - 2016-17 plus forecast growth (f) at 4% - Source ABARES

This is not to suggest that the $100 billion target is a done deal. A business as usual growth rate requires considerable effort to maintain and the NFF is correct to pursue this figure as an ambitious target. To sustain the same growth rates for the next 13 years that agriculture has achieved over the past two decades requires, at a minimum, the same levels of investment in R&D, infrastructure, and market development and expansion to be maintained. In an environment of diminishing public spending on agriculture and increasingly competitive global markets this will be a challenge that will require the full attention of all in agriculture.

Is it the equivalent of putting a man on the moon? Arguably not. Should there be a growth target for Australian agriculture that is equally ambitious?  

The demand side of the production equation would not seem to limit ambition in this context. Commentary on global agricultural trends that does not mention the forecast rise in middle class consumption is difficult to find. For example, a Brookings report estimates that by 2030 there will be $29 trillion more per year spent by the global middle class. Much of that spending will be in Asia (approximately two thirds of the global middle-class population), and much it will be spent on high value food and fibre.

Just like the arms race of the cold war inspired the aspirational target to put a man on the moon, there will be a global agricultural export race to supply these burgeoning markets for food and fibre. Australia needs an aspirational target that will position us to not just hold our own but to pull ahead in that race or we risk being left behind while others take the spoils.

http://www.farminstitute.org.au/