Ag’s $100b goal at risk without supersized infrastructure push

By , 17/12/2018 16:21

needs to significantly improve its agricultural and transport infrastructure, including develop regional airports like Queensland’s new Toowoomba Wellcamp Airport, to farming regions directly to Asian markets says KPMG. must get cracking and build more international airports in regional areas and vastly improve other transport and agricultural infrastructure if our farm sector is to hit its $100 billion production goals by 2030.

We are not making enough ground fast enough to be a serious long-term contender in the Asian food sector says leading Asia watcher and business adviser, Doug Ferguson.

While burgeoning Asia’s share of ’s total farm exports jumped from 52 per cent to 69pc in the past decade, the efforts of our 90,000 farmers and farming companies need more logistical support and a greater productivity focus to adequately service Asian hunger for food imports.

“Asia remains a massive market opportunity, but international competition from traditional and new players is building rapidly,” warned Mr Ferguson, who leads business services company KPMG’s international markets business, and lived in China for a decade until 2012.

He is also chairman of the Asia Society in and former vice president of the China Business Council of NSW.

He highlighted how new multilateral trade agreementswere helping trading rivals access valued n export markets such as China, South Korea, Vietnam, Indonesia, and many more.

China’s influential new “Belt and Road” initiative was also building trade, infrastructure and political ties with new food suppliersin Africa, Eastern Europe, Central Asia and the Asia-Pacific region.

Doug Ferguson, KPMGRegional airport hubsHe noted atlast week’s agricultural Outlook 2018 conference in Canberra the federal government’s inland rail project offered considerable scope to linka series of inland freight hubs andairports servicing direct exports of perishable fresh produce to markets in Asia, and elsewhere.

Pointing to the success of southern Queensland’s new Toowoomba Wellcamp Airport, which promises to connectthe agriculturally rich Darling Downs and Lockyer Valley directly with overseas buyers, he said other similar airport developments could also be privately financed, usingAsian capital and construction expertise, if needed.

“Ifan airport already exists, these aren’t big ticket projects,” he said.

KPMG’s Asia and international markets business leader, Doug Ferguson.

“You’d only need $50 million to $100m (each) to get these facilities handling product from various food production zones around the country.

“Back in the mid 1990s the Inland Marketing Corporation, at Parkes, which is a key road and rail junction in central NSW’s food producing heartland, had visionary plans to air freight fresh produce overnight to the supermarkets of Asia.

“It failed to get necessary government backing, so perishable food still goes by truck to Sydney and then via passenger flights, which limitsits supermarket shelf life in overseas markets.”

Mr Ferguson said northern Victoria, Canberra and northern Queensland regional centres were other areas which seemed logical asserious export hubsand could also lureinbound tourists from Asia’s fast growing urban middle class.

“The inland rail link and the Western Sydney Airport freight precinct are positive developments, but needs a co-ordinated comprehensive and funded solution for rural and regional infrastructure.”

Simply sealing rural roads could cut livestock and grain transport costs by about24pc.

He believedestablishing such nation-building infrastructure should be a priority for government, which could then sell out to private investors.

China can helpChina, meanwhile “does infrastructure better and more cost efficiently than just about anybody in the world” and could be a valuable capital and construction partner incritical infrastructure projects.

“Chinese road and rail construction companies like local firm John Holland’s parent company, CCCI, mayhelp deliver major road, rail, port and water projects, including northern n agricultural developments,” he said.

However, Mr Ferguson conceded Canberra had taken a cautious approach towards major Chinese investment in agriculture, and particularly Beijing’s Belt and Road agenda.

Doug Ferguson, KPMG

Recent public controversy over a Chinese state company’s long-term lease on the Port of Darwin had also prompted stricter national interest protocols, which seemingly made appear “no more welcoming of Chinese investment in big infrastructure opportunities than five years ago”.

It was unfortunate big scale ag-related investments continued to be low priorities for the short-term focused local superannuation industry, despite some increased activity of late.

also needed a “big bold” water blueprint and investment to better usethe nation’s water resources, overcome historic water claimsand political rivalries, and move water from northern high rainfall areas to southern regions to foster greater agricultural scale and grow crops Asian markets desired.

“We must start focusing on what Asia wants –educating andencouragingfarmers to be confident about growing products that may be different to what they do now,” he said.

“That maymeanmany more vegetable crops and probably aquaculture.”


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