Just as Australia is highly efficient in extracting commodity minerals through our resources sector, we are likewise World Champion commodity food producers, with some 70 per cent of our food production heads offshore in the form of commodity exports.
While our commodity food production prowess is foundational to our national story, we cannot similarly claim to be adding much value onshore. Whether you are talking about onshore minerals processing or onshore food processing and manufacturing, Australia is leaving a lot of value on the table.
That’s the clear view of Dr Mirjana Prica, the managing director of Food Innovation Australia Limited (FIAL), one of the federal government’s six Industry Growth Centres that target an industry where the nation believes it holds some competitive advantage.
In this episode of the Commercial Disco, Dr Prica talks about the food and agribusiness sector as a single value chain, a single ecosystem. And right now, there are structural impediments getting in the way of Australia extracting more value from it.
Australians have an innate belief in the superpower status of its agricultural sector. It’s innate, a cultural heritage of wheat and sheep and cattle and canola.
But agriculture is only the start of the value chain, Dr Prica says, and by not pursuing more vigorously the next step of food processing and manufacturing, we are selling ourselves short.
The food and agribusiness sector is made up of two components or sub-sectors – agriculture (pre-farm gate), and food and beverage (or food manufacturing post-farm gate). The agriculture subsector produces the inputs or ingredients for food and beverage manufacture.
Together, the agriculture and food and beverage subsectors form one value chain, or one ecosystem that is better known as food and agribusiness.
According to the FIAL Capturing the Prize report, Australia has the potential to grow the value-added capacity in the food and agribusiness sector from its current level around $70 billion to $130 billion by 2030. This includes the addition of 300,000 jobs.
The opportunity is not just about canning corn or snap-freezing strawberries. The value-add can come from everything from supply chain transformation – including the tracing of fresh foods from the farm source to the consumer plate – to creating plant-based protein substitutes to improved energy efficiency in food production.
“The commodity agricultural crop is really important to our country and to economy, but the real opportunity is how do we capture that value-adding [potential] and how do we capture that differentiation,” Dr Prica told InnovationAus.com.
“This year was a bumper crop, but next year that may change … so the real challenge for us is how do we have a nice diverse portfolio so that we’re not impacted by the cycle of commodity crops.
Do you know more? Contact James Riley via Email.