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Agribusiness

Ag in the Asian Century upbeat: InterFinancial

ANALYSIS of Australia’s agribusiness sector, reinforced by the mood at the recent Ag in the Asian Century conference, is upbeat “and not surprisingly” according to mergers and acquisition specialists for the sector, InterFinancial.

InterFinancial’s food and agribusiness sector director David Hassum reported that Australian agriculture producers had already honed in on a few key advantages the national sector holds and were “bearing fruit already”. 

Facilitated by Toowoomba and Surat Basin Enterprise (TSBE), with the support of the Regional Council, the conference succeeded in delivering practical knowledge to participants on innovation and export opportunities in the food and agribusiness (F&A) sector, Mr Hassum said.

“For us, a few key themes emerged from the insightful and diverse array of speakers,” he said. These backed up predictive reports InterFinancial had been distributing to its clients for several years.

“Australian food exporters should define where and how they can be most competitive,” Mr Hassum said. InterFinancial has recently produced information charts – drawn from information published by FAOSTAT, World Bank, United Nations and NAB – that show China’s population “already receives a relatively high percentage of its calorie intake from meat”, he said.

“As per capita income increases, meat consumption won’t increase, rather people will substitute for higher grades of meat, nuts, fresh fruit and milk.

“So the opportunity in China is for branded and niche markets. There are still opportunities in other Asian countries for volume exporters, though.”

Mr Hassum said another strong message from the conference was that “exporters need to do their homework, looking at individual markets and products rather than just targeting ‘Asia’”.

“Of course that’s no different than any other market, and we are more than accustomed to dealing with red tape,” Mr Hassum said.

A key message was that Australia is already seen in China and across Asia as a reliable source of clean, high quality produce.

“We need to do all we can to improve our logistics networks and use our technology expertise in order to satisfy increased demand and maintain our position as a preferred trading partner,” Mr Hassum said.

One of the most interesting aspects of the conference was that “the general vibe in the region was surprisingly upbeat”.

“On an earlier visit this year the atmosphere was notably sombre, with business owners strapping themselves in for a tough year following the conclusion of the construction stage of large scale oil and gas projects,” Mr Hassum said.

“While uncertainty still exists in the oil and gas sector, opportunities in other sectors such as agribusiness seem to be driving optimism across the board. Perhaps this optimism emanates from the ‘can do’ attitude of the community, of which there’s no better example than the Wellcamp Airport, the first greenfield public airport built in Australian in 50 years and the first to be privately funded.

“This is a true ‘build it and they will come’ project, and once other key infrastructure planks are in place we see this as being a real catalyst for growth in the area, particularly in the agri sector.

“With that said, investment is also about timing. The F&A sector has been hot for a few years now, and for good reason,” Mr Hassum said.

“However, sectors inevitably swing in and out of favour, and it’s always better sell on a positive trend rather than trying to pick the peak of the market.

“Overall, the event was well organised, relevant and insightful, and we highly recommend that those in the sector attend in future years.”

www.agintheasiancentury.com.au

www.tr.qldgov.au

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Major grains industry forum set for Bendigo

THE VICTORIAN grains industry will launch into the 2016 cropping season when the Grains Research and Development Corporation (GRDC) hosts a major forum in Bendigo in February to support growers through the coming year.

The GRDC Grains Research Update, on February 23 and 24, this year entitled ‘Informed decisions and driving change’, will be attended by agronomists, consultants, researchers, growers and other grains industry personnel committed to ensuring the state’s cropping sector remains productive and profitable well into the future.

GRDC Southern Regional Panel chair, Keith Pengilley said advances in technology, cutting-edge advice and outcomes from GRDC-funded R&D offer the state’s growers the opportunity to make positive changes to their farming systems. 

“With production costs continually rising, growers and their advisers are looking for ways to generate on-farm efficiencies,” Mr Pengilley said. “When seeking out ways to do that, the best place to start is the annual two-day Update which is being held in Bendigo in 2016.”

The two-day forum, held in Ballarat in previous years, will be conducted in Bendigo in 2016. The change of location has been driven by attendances out-growing the Ballarat venue and the recent opening of the impressive Ulumbarra Theatre complex in Bendigo where the 2016 Update will be located.

The Update will feature a line-up of expert speakers from throughout Australia and overseas who will provide insights into research developments and advice about progressing cropping enterprises.

Considered the state’s premier grains research, development and extension (RD&E) forum, the Update will showcase innovative thinking, products and practices.

Eyre Peninsula (South Australia) grower and consultant Ed Hunt will delve into the management of profitability and risk in a grain business, while CSIRO’s Saul Cunningham will look at the potential threat to neonicotinoids and their impact on bees.

Other keynote speakers include high profile Canadian agriculturalist Robert Saik, from Agri-Trend, who will outline the 10 drivers that will shape agriculture in the next decade. There will also be a panel of experts to explore how growers can make better use of their fertiliser dollar.

The Update program will offer a wide range of timely topics and issues and will provide maximum choice for attendees to construct their own preferred learning path over the two days.

Relevant agronomic issues to be covered on day one include soil moisture probes; Rhizoctonia control tactics; effective use of imagery and data; solutions for stubble troubles; cereal disease threats; blackleg in canola; integrated pest management; cereal agronomy and cultivar performance; and the value of break crops in low rainfall farming systems.

Other day one topics include best practice agronomy for pulses in the high rainfall zone; new insights into snail and slug control; subsoil manuring in the medium-low rainfall zones; and emerging research by GRDC-funded PhD scholars.

Among the subjects to be addressed on day two are best practice agronomy for pulses in the medium and low rainfall zones; dual purpose cropping; emerging herbicide challenges; herbicide residues in soil; crops for hay; understanding healthy soils; weather forecasting; best practice with fungicides; and the mechanisms of natural weed suppression.

GRDC Update Dates page has the latest details.

 www.grdc.com.au

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Comment sought on new bio-security regulations

DRAFT regulations under the Biosecurity Act 2015 have been released for public comment.

Federal Agriculture and Water Resources Minister , Barnaby Joyce, encouraged all interested parties to have a say on the draft regulations for approved arrangements, the Inspector General of Biosecurity and infringement notices. 

"These three regulations will form an important part of the new Biosecurity Act 2015, and are key to how the Australian Government will manage our biosecurity system in the future," Mr Joyce said.

"Approved arrangements provide an opportunity for businesses to enter into a voluntary arrangement with the Commonwealth to manage the biosecurity risk associated with their activities; the Inspector General of Biosecurity is an important statutory position to provide independent oversight of our system; and infringement notices are one of the tools we have to punish wrongdoers.

"So these are incredibly important regulations that we want your feedback on. The government has engaged in meaningful consultation throughout the development of our new biosecurity legislation and listened to feedback about how we can modernise it.

​"I am pleased to continue in that commitment, and invite all interested people and organisations to have their say—all comments received will be considered in final drafting of the regulations."

Minister Joyce said the biosecurity system was at the heart of a profitable agriculture industry and strong farmgate returns.

"As an island nation Australia is free from so many of the damaging pests and diseases that affect other parts of the world—but with increased movement of people and goods across the world, comes increased risk of exotic pests and diseases reaching our shores," Mr Joyce said.

"Not only does our biosecurity system protect our agricultural industries, environment and economy from pests and diseases that could affect our local plants and animals, but it also underpins our favourable trading status.

"Our strong market access to a range of countries is built on freedom from many exotic pests and diseases—and with a serious biosecurity incursion we could stand to lose access to these markets.

"This is why it's so important to get these new biosecurity regulations right—because biosecurity does underpin so much of what makes Australian agriculture profitable. When agriculture prospers, our whole country and economy benefits."

Consultation is open for a minimum of 60 days.

agriculture.gov.au/biosecuritylegislation

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CSIRO develops its own research farm

CSIRO has bought 290 hectares of land at Boorowa in New South Wales to develop its agricultural research program.

CSIRO agriculture director John Manners said CSIRO would continue its world leading agricultural science from the new purpose-designed farm. 

“Establishing a new facility in a rural area allows us to take a green field approach to the site and our science,” Dr Manners said.

“This can enable us to conduct research into very new ways of farming, including the application of digital farming technologies. The new site is approximately 100 kilometres from our current site, allowing our Canberra researchers to continue their field trials on the new site.”

The purchase of the Boorowa property comes after CSIRO’s announcement of a request to the National Capital Authority to include the Ginninderra property as ‘urban area’ on the General Policy Plan for Metropolitan Canberra in the National Capital Plan draft amendment being released for consultation in September.

“The Ginninderra site has contributed to major progress in Australian science through the work of our programs in developing novel grains and sustainable and productive agricultural systems,” Dr Manners said.

Former Industry and Science Minister, Ian Macfarlane said at the time that the purchase of the new property would see the government scientific research arm boost its investment in agricultural sciences.

“Agricultural science and technologies which improve the competitiveness of Australian agribusinesses are an important part of CSIRO’s research,” Mr Macfarlane said.

“The purchase of the new farm in Boorowa ensures CSIRO’s research will continue and will better enable CSIRO to develop and deploy the latest in sustainable farming science and technology into the site.”

Federal Member for Hume Angus Taylor said the purchase was great news for the region.

“Boorowa is one of Australia’s most significant areas for primary production and I am delighted its reputation will continue to be synonymous with agricultural excellence," Mr Taylor said.

“Breakthroughs in technology have defined Australian agriculture. Hosting the customised farm research facility will ensure a long and beneficial relationship between the region and CSIRO.”

Mayor of Boorowa Shire Council, Wendy Tuckerman said the purchase of a farm in the local government area was fantastic news for the region.

“The purchase of the land in Boorowa by CSIRO has been a big win for the region,” Mayor Tuckerman said.

“We hope that this purchase brings researchers, scientists and staff to the region and pays dividends for both CSIRO and the community. We look forward to working with CSIRO into the future for the best outcomes of the region and the country.”

www.csiro.au

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Agribusiness growth boost from Federal White Paper

A STRATEGY to remove barriers in Australia’s agribusiness sector and improve competitiveness has emerged through the Federal Government’s new white paper.

The Agricultural Competitiveness White Paper is positioned by Prime Minister Tony Abbott and Agriculture Minister Barnaby Joyce as an investment in Australia’s farmers and competitive strengths in agriculture.

In practical terms, the white paper has a list that aims to lower taxes on the sector, cut red and green tape, build infrastructure, encourage trade, develop northern Australia, and support business to innovate and create jobs, Mr Abbott said.

“A strong agriculture sector contributes to a strong economy – and that means more jobs, more exports, higher incomes and better services to the community,” he said. “We’re determined to make the sector even more competitive and to deliver practical actions that will keep our farmers and farming families profitable and resilient.” 

The white paper and the 2015 Budget combined offer significant tax changes for farmers.

Banks are now able to use farm management deposits (FMDs) as a business loan offset, reducing interest costs estimated at up to $150 million a year, from July 1, 2016. Also from that date, farmers can opt back into income tax averaging after 10 years, while farmers can also double their FMDs to $800,000.

The immediate tax deduction for fencing announced in the Federal Budget has already had a positive effect on the sector, as has the tax deduction for the cost of new water infrastructure. Farmers have also positively received the accelerated three-year depreciation of capital expenditure on fodder assets.

On the investment front, Mr Abbott said the government would will help farmers achieve a better return at the farm gate by investing $11.4 million to boost ACCC engagement with the agricultural sector including a new Commissioner expert in agriculture, plus $13.8 million in a two-year pilot program to provide knowledge and materials on cooperatives, collective bargaining and innovative business models.

“This will help farmers to establish alternative business models, including cooperatives, and manage contract negotiations,” Mr Joyce said.

INFRASTRUCTURE FOCUS

Mr Joyce said as part of the government’s commitment to reduce red tape from the economy by $1 billion each year, an additional $20.4 million has been made available to streamline agricultural and veterinary chemicals approvals.

“Improved country of origin labelling will also let consumers know where food is grown and processed,” Mr Joyce said.  There was also a big focus on infrastructure, especially water resources for agribusiness.

“The white paper builds on the government's investments to build 21st century water, transport and communications infrastructure, including a new National Water Infrastructure Fund,” Mr Joyce.

The government announced a $500 million National Water Infrastructure Fund, made up of $50 million to undertake the detailed planning necessary to inform future water infrastructure investment decisions and $450 million to construct national water infrastructure, in partnership with State and Territory governments and the private sector. He said $200 million of the fund will be dedicated to northern Australia projects.

As part of the infrastructure push, CSIRO’s TRAnsport Network Strategic Investment Tool (TRANSIT) would be expanded to ensure future decisions on transport infrastructure investment deliver maximum benefit, the Prime Minister said.

“The government is already delivering on its commitment to invest $50 billion for current and future infrastructure,” he said. “The $29.5 billion National Broadband Network (NBN) rollout will improve access to technology and give farmers more market options.

“The Government is investing an additional $60 million on top of the $100 million Mobile Black Spot Programme to improve mobile coverage across regional Australia.”

There was also $35 million allocated for local infrastructure projects to help communities suffering due to drought, along with other drought management strategies.

“Australia will always stand by farmers in drought,” Mr Abbott said.

Including initiatives announced in the 2015 Budget, the white paper provides long-term support for famers when they need it most, he said.

There were to be up to $250 million in Drought Concessional Loans each year for 11 years; $22.8 million to increase Farm Household Allowance case management for farmers; increased financial counselling services and improved access to community mental health; access for farmers to their FMDs when needed, without losing tax concessions; $25.8 million over four years to manage pest animals and weeds in drought-affected areas; and the Federal Government has offered farmers “advice and help” from the Australian Taxation Office.

SMARTER APPROACH

Mr Joyce said the white paper supports “a smarter approach to farming based around a strong research and development system that underpins future productivity growth”. He said there was also an effective natural resource policy in place “that achieves a cleaner environment as part of a stronger Australia”.

The white paper also provides the agriculture sector access to the most advanced technologies and practices by investing $100 million to extend the Rural R&D for Profit Programme to 2021–22 and $50 million to boost emergency pest and disease eradication capability. There is also $50 million for better tools and control methods against pest animals and weeds and $1.4 million to match industry levies and contributions in the export fodder and tea tree oil industries.

Mr Joyce said $1.2 million was set aside for the Rural Industries Research and Development Corporation. He also said the government was already helping farmers access skilled and reliable labour by focusing on better training through the $664 million Industry Skills Fund and making visa programs more flexible, such as expanding the Seasonal Worker Programme to all agricultural industries and removing the annual cap.

Mr Joyce said that while the Federal Government was opening new export markets, it would also protect Australia's highly prized biosecurity status, “which underpins our valuable exports”.

He said there would be $200 million to improve biosecurity surveillance and analysis nationally and $30.8 million to break down technical barriers to trade, along with the appointment of five new overseas agriculture counsellors.

An investment of $12.4 million was being made to modernise Australia’s food export traceability systems “to further enhance our food safety credentials,” Mr Joyce said.

www.agwhitepaper.agriculture.gov.au

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Using maths to cut cattle transport costs

EXTRA >>

A NEW TOOL developed by the CSIRO is helping reduce the cost and time of transporting cattle in Australia – and this can account for up to 40 percent of the market price.

The new tool developed by CSIRO, the Transport Network Strategic Investment Tool (TRANSIT), identifies ways to reduce travel distance and time, saving fuel costs, cutting down on wear and tear and minimising stress for both truck drivers and cattle. 

Cattle face some of the longest journeys of any Australian commodity, according to the CSIRO. In northern Australia, cattle travel an average of close to 1000km, and as much as 2500km to reach east coast abattoirs.

“In developing this tool we completed the most comprehensive mapping of the cattle supply chain in Australia,” lead researcher Dr Andrew Higgins said.

“We can now use TRANSIT to identify key investments, large and small, at critical points in the supply chain, along with policy changes that might allow for better planning.”

As well as establishing the most direct transport routes, TRANSIT can identify the best opportunities for infrastructure and policy development, including increased access for higher productivity vehicles on some roads, and improved links to rail.

By providing a holistic view of the direct and indirect transport costs across the entire road network, TRANSIT has informed many infrastructure and policy opportunities under consideration by governments, industry and community in northern Australia.

For example, TRANSIT has modelled the potential benefits of sealing the remaining 105km of the Hann Highway north of Hughenden in central Queensland.

The tool shows that this would reduce travel time on the Highway from five hours to three and a half hours, saving about 1160 hours for the estimated 1300 road trains currently using the road per year.

TRANSIT also identified that the number of road trains using the fully sealed Hann Highway would increase by 25 percent, as it would become an optimal travel route, removing heavy vehicles from the congested coastal highways.

These benefits translate to a modelled cost saving of $1.23 million per year, plus the additional savings from shorter return journeys for empty trucks and benefits to other road users.

“Other advantages from a more efficient supply chain are improved safety and welfare of the live animals and the truck drivers themselves taking these long journeys, reduced emissions, and a more sustainable industry at a time of growth,” Dr Higgins said.

For northern Australia, the TRANSIT project takes in data on 12,000 properties, finishing farms, sale yards, feedlots, export yards, rest stops, abattoirs and ports; and 15,000 road segments (ranked according to highway, major road or minor road, sealed or unsealed, among many other factors).
The team also consulted with transport operators such as Liz Schmidt, a director of Schmidt Livestock Transport in Townsville and past president of the Australian Livestock and Rural Transporters Association.

“The TRANSIT team’s consultation with industry has been especially valuable for the ‘mum and dad’ trucking operations with limited resources," Ms Schmidt said.

Dr Higgins said that beyond cattle, TRANSIT would now be applied to other agricultural transport, particularly degradable produce.

It is already being applied to the cattle industry Australia-wide – mapping the path of about 60,000 origin-to-destination movements representing 20 million cattle transported in Australia per year.

“It gives us a truckie’s-eye view of a supply chain, factoring in thousands of small decisions in planning routes,” Dr Higgins said.

“The beef industry has faced difficult times lately, but now there is a focus on northern Australia and all the northern states are planning for expansion.

"Our hope is that this tool can make every long journey as short as it can be, and help to expand sustainable industry.”

www.csiro.au

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Jump for Joyce: new China live cattle export market

A BREAKTHROUGH live cattle export market agreement with China has been signed by the Australian Government, even as the traditional Indonesian market has been set back from 250,000 head of cattle to just 50,000.

Federal Agriculture Minister, Barnaby Joyce said on July 20 the Australian and Chinese veterinary authorities were in the process of formalising agreement on animal health certification requirements, which would allow industry to begin to prepare the commercial and Exporter Supply Chain Assurance System (ESCAS) arrangements for trade to commence. 

“I was very pleased today (July 20) to sign the agreement of health conditions for trade of Australian feeder and slaughter cattle to China—now it’s over to my counterpart, Minister Zhi Shuping, to sign on the dotted line and finalise the agreement between our two nations,” Mr Joyce said.

“Over the past five years we’ve had a significant trade in breeder cattle with China, primarily for dairy heifers. Now, I’m pleased to announce we are a step closer to the commencement in trade in live slaughter and feeder cattle to China.

“Getting the groundwork right for any new market can take time, and now the industry can prepare to begin this trade.

“This will be the seventh livestock slaughter cattle export market that I’ve opened since becoming Minister—adding to Lebanon, Bahrain, Egypt, Iran, Cambodia and Thailand.

“Market access is a major priority for the Australian Government—we have sent a clear message—Australia is open for business.

“And it’s not just our cattle producers who are experiencing greater market access opportunities, with the announcement earlier this year of agreed health protocols for breeder deer to Malaysia, and breeder sheep and goats to the Philippines,” Mr Joyce said.

“The Australian Government has worked hard to make sure our livestock producers and exporters have every opportunity to trade with other nations.

“Once the agreement is formalised, exporters will be able to begin working with importers in China to implement the Exporter Supply Chain Assurance System and establish supply chains that meet those requirements. 

“This industry is a real Australian success story. We are known world-wide for our high-quality and reliable livestock trade, and now industry has another opportunity for trade to increase,” Mr Joyce said.

www.agriculture.gov.au

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