Breaking News on Food, Beverage & Supplement Development - Asia PacificEU edition | US edition

Headlines > Markets

Food-secure Oz needs greater productivity if it wants to stay that way

By RJ Whitehead , 17-Apr-2014

While Australia is currently one of the most food secure nations, its agriculture system must increase production by 2050 if it is to continue feeding itself and the wider swathes of Asia it supplies, according to a new study.

According to the Global Food and Water Crises Research Programme’s latest strategic paper on consumption patterns and food demand in Australia over the next 36 years, the country is currently self-sufficient in key food commodities including meat, dairy and grains. 

Growth unachievable

Criticising government estimates, the study concludes: “Treasury’s prediction that agriculture will grow from its current 2.5% contribution to national GDP to reach 5% by 2050 is unachievable without driving up productivity in the agricultural sector, using current, or fewer, resources.”

Australia currently exports 70% of all the food it produces, maintaining a strong food trade surplus. Global demand for Australian food products is greatest for unprocessed grains, wheat, beef, sheep and dairy.

Domestic production currently supplies 90% of domestic food demand, with the remaining 10% met by imports. However, its agricultural growth could be vulnerable as 2050 nears due to decreasing competitiveness of food production and the effects of climate change, while changing population demographics will also put pressure on supply.

According to the Department of Treasury, Australia’s population will rise to approximately 35.9 million people by 2050. 

Australia’s growing population, coupled with increasing per capita consumption, will increase the pressure on our domestic food system to maintain an economically healthy trade surplus,” the report said.

We can already produce enough food for the growing demand of our domestic market; however this would be at cost to our food exports. The agricultural sector will need to improve productivity substantially to meet both domestic and export demands.”

Demand segments

High domestic demand for processed foods also presents food security concerns, and the sector faces significant constraints from high costs and retail price deflation, which threaten the long-term viability of Australia's key food processing capabilities, it adds. 

The continuation of domestic dietary trends that rely on processed products, may mean a move away from Australian produce and an increased reliance of food imports by 2050.

Other consumption trends are becoming evident through patterns of wheat, seafood and dairy consumption. Wheat consumption has increased by 55% per capita since the ‘Seventies, and despite a slight drop in consumption last year, growth in wheat consumption from 2010 to 2013 averaged 12.6%.

Australians now consuming 16kg of seafood per person each year, making it the fifth largest segment in agricultural. Demand for dairy has also increased steadily over the last five years, and the report attributes this to Australia’s “coffee culture”.

The study notes other challenges, which include distribution issues, resource scarcity, diminishing labour pools, weakening competitiveness and market access restrictions, adding: 

If these issues are not addressed, Australian agriculture will not reach its growth targets by 2050,” it says.

Key Industry Events