Monthly Archives: July 2015

Bush Matters Op-Ed – “Feeding the elephant and the dragon”

23 July 2015

While many of us have keenly watched the century old contest against England at Lord’s during this past week, a completely different pursuit is bowling over Australians a little closer to home.

I’m talking about the race to feed the growing appetites of the elephant and the dragon.

In many ways the economies of India and China are still awakening, with academics and economists speculating that both countries will surpass the United States in earnings and growth over the coming decade or two.

It is little wonder that Trade Minister Andrew Robb and Agriculture Minister Barnaby Joyce have identified these nations for attention and dedicated significant resources to improving political and business relationships ties with both countries.

India and China are both emerging economies that have exhibited annual GDP growth greater than 7.5 percent over the past decade. This is at least three times the rate of more advanced economies.

At the same time, Australia has seen a strong resource and housing boom that has fuelled uninterrupted economic growth over the past two decades. No other developed economy has experienced anywhere near this success.

It has placed all these nations on a reasonably strong footing as we look to how best we can improve our international competitive advantage in the coming decades.

It is remarkable to think that China now imports more goods on a single day than it did on any given year throughout the 1970s.

The benefits to the Australian economy, especially rural industry, from these dramatic import increases across China have been only felt in the past decade; there is still much evidence to suggest the best years still lay ahead of us.

Australian agriculture has an enviable reputation for ‘clean, green and safe’ produce that will help ensure our farmers increasingly seek a price premium over many global competitors in terms of quality.

The Chinese have also proven to be very keen for our product with Barnaby Joyce announcing this week that the Federal Government was a step closer to the commencement in trade in live slaughter and feeder cattle to China.

When the deal with China is finalised, it will be the seventh livestock slaughter cattle export market the Federal Government has opened since being elected — adding to Lebanon, Bahrain, Egypt, Iran, Cambodia and Thailand.

Andrew Robb, who is perhaps the busiest trade minister on the planet, has also been driving home Australia’s part in the Trans Pacific Partnership (TPP) agreement, which involves 12 countries and collectively represents 40 per cent of global GDP or about $28 trillion as well as 800 million people.

Modelling work conducted by the US Department for Agriculture shows that Australia would be the biggest beneficiary of all 12 countries under the TPP.

By 2025 the TPP could add U.S. $2.6 billion extra to the annual value of our agricultural exports — an increase of more than 19 per cent.

This would include $1.6 billion extra for our meat exports, $357 million for dairy, $161 million for cereals and $485 million extra across a range of other agriculture and horticulture.

Andrew Robb has also returned from his third visit to India this year in a continued effort to construct and finalise a strong and mutually-beneficial Comprehensive Economic Cooperation Agreement (CECA) by the end of 2015.

India is currently Australia’s 12th largest trading partner. In 2014, Australian foreign investment into India reached $9.8 billion.

There is also strong evidence that signing a CECA with India will provide more opportunities for Australian farmers.

It’s clear that India’s appetite is changing with the highest increases in food consumption coming from product previously too expensive and thus not typical of an Indian’s daily diet.

An additional 320 per cent increase in India’s per-capita gross domestic product (GDP) by 2030 is likely to further drive increases in overall food consumption over the next 20 years.

It’s clear already that increases in income has led to diet diversification, with Indian consumers moving away from traditional grains such as jowar and bajra to higher quality grains such as wheat and rice and, more recently, increasing consumption of high value food products such as milk, egg, meat, and fruits and vegetables.

From all reports, the change is occurring among both rural and urban households.

But aside from enabling our farmers to export primary produce, the Australian Government believes there are strong opportunities for Australia and India to also trade in service delivery.

In a recent opinion piece that appeared in The Hindu Business Line newspaper in India, Andrew Robb argued that a “services silk road” could be established where Australia trades its skills and expertise in exchange for the skills and expertise of other nations we have established free trade agreements with.

Robb wrote that Australia, like India, is something of a services superpower.

“Australia is renowned for its mining and agriculture sectors — which are indeed among the best in the world — so it’s perhaps a secret that our biggest export is services, which account for over 40 per cent of our valued-added export earnings,” he stated.

“We see tremendous synergies between dynamic sectors in Australia and India — be it health and aged care, education and skills, IT and communications, legal and accounting services, financial services, insurance, and architecture.

“Some of the most exciting opportunities are in agriculture: Australian dairy cows are five times more productive than Indian cows, a gap that can be narrowed — to the great benefit of India’s farmers — by investment and technology transfer.”

So where once Australia focussed on shipping its primary goods to other nations, there is great scope for our nation to build training courses and sell our new technologies in leading industries such as agriculture and mining.

If done correctly, it will provide real opportunities for smart and adaptable Australian agriculture companies to export their frontline intellectual services to the fastest growing regions in the globe.

Whichever way you look at it, for a middle power nation such as Australia, working with the dragon and the elephant can provide real opportunities to expand beyond our borders, increase business profitability and reach billions of new customers.

Beef Central Op-Ed – How ‘Kanganomics’ skips the facts

16 July 2015

Last week The Conversation website published an article (1) that had many on the conservative side of politics shaking our heads in disbelief and again wondering who, if anyone, could be fooled by such a fantastic list of incorrect claims and mistruths about the kangaroo industry and, more broadly, rural Australia.

Titled, “Kanganomics: it’s not worth killing kangaroos,” the article argued that Australia should not pursue a kangaroo meat and hide industry because it threatens the future sustainability of the animal numbers and wider ecosystem.

In an effort to bolster their claim that kangaroos are at risk of decline, the authors employ an inadequate methodology for data collection of kangaroo populations and harvests.

The most prominent is the authors’ claims that despite the Macropodidae family being critical to ecosystem health in Australia, there were 1.61 million adult kangaroos killed in 2012.

The authors choose not to provide any context to this figure, notably that annual harvest quotas are set by state conservation agencies and are generally limited to around 15 per cent of the estimated population in the harvested areas.

Despite this, the actual number of harvested kangaroos have very rarely reached the available quota.

The data available from the Federal Department of Environment (2) clearly shows that in 2012 aerial and ground surveys of kangaroo species available for commercial harvesting (Red Kangaroo, Eastern grey Kangaroo, Western grey Kangaroo and the Euro/Wallaroo) estimated the total population to be about 39.5 million nationwide.

In the same year, the commercial harvest number across Australia was 5.25 million.

This means the actual harvest figure of 1.61 million quoted by the authors was less than 30 per cent of the available harvest quota for that year and less than 5 per cent of the total population of harvestable kangaroo species in 2012. (2)

This brings me to my second major issue the authors of ‘Kanganomics” have chosen to overlook in their paper – the long-standing protocols, supported by Federal and State Governments as well as industry, to ensure kangaroo harvests are sustainable and do not endanger long term kangaroo populations.

Instead of rational arguments, the authors use extreme and absurd statements that only jeopardise their intellectual integrity.

Referring to the Federal Government’s efforts to grow kangaroo exports, the authors state: “If we truly wanted to expand jobs at any cost, we could expand the whaling or sealing industry, overfish our endangered marine species.”

This offensive statement ignores the fact that Australia has legislation stopping the harvesting of seals and whales because these animals are endangered and through these legal frameworks we provide genuine attempts to protect the environment.

Kangaroos, however, are not at threat of extinction, nor are they facing terminal decline.

This fact is supported by more than three decades of available and reliable data, which shows the harvest quota is always well below actual population estimates and the actual quota levels have almost never been met.

kangaroos

The kangaroo meat and hide industry has long been forced to battle against the boisterous yet unfounded claims that kangaroos are somehow at risk of extinction.

This is despite there being no population data to support this point. (4)

Instead, there has been decades of sound, sustainable management that has been consistently confirmed by multiple kangaroo management reviews, carried out by independent scientists. (4)

Academic studies into the industry have concluded that if the kangaroo industry were able to expand it could increase rural productivity, leading to more effective harvesting as well as support for the livestock industries by reducing grazing pressures, especially during drought conditions. (3)

Regrettably, the authors of ‘Kanganomics’ do not provide any mention of such reviews and instead concluded with the argument to focus on the apparent ‘external costs’ that rural industry somehow owes the environmental movement.

According to the definition provided by the authors, “an external cost occurs when producing or consuming a good or service imposes a cost upon a third party.”

The authors qualify this statement with the claim that “commercial harvesting of kangaroos creates an external cost on anyone concerned with conservation and animal protection or anyone who feels an obligation to protect these iconic species.”

To claim that somehow graziers must pay an ‘external cost’ to conservationists or animal protection groups could only be valid if you accept that kangaroo populations are at risk, kangaroos are the property of the landholder and kangaroos do not force cost burdens onto the landholder’s business.

Again, the authors fail to grasp the reality of the kangaroo industry across rural industry or provide any supporting evidence to justify their call for compensation for any ‘external cost.’

There is overwhelming academic and anecdotal evidence to prove landholders carry the huge financial burden from kangaroos on their properties without personal benefit.

Landholders don’t capture any benefits from the kangaroos because the animals move from property to property. (3)

Instead, kangaroos impose a significant burden on the landscape, especially through grazing pressure.

According to Rural Industries Research and Development Corporation, a very conservative economic assessment of kangaroo population impact shows an annual cost of A$ 104 million to landholders.

This limits the amount of value-creating livestock that could be run in a paddock, which is a definite landholder cost the authors of this paper do not ascribe to kangaroos in their economic accounting.

Most landholders would prefer to not have kangaroos on their properties and many spend large amount of money to fence them out.

Yet despite the significant burdens kangaroos place on rural industry, as we have demonstrated, there are regulatory frameworks that are maintained to ensure kangaroos are harvested at sustainable numbers.

The tussle among green groups for the media spotlight and the finite not-for-profit dollar has transformed the environment movement into a genuine three-ring circus.

Just like the adage about fools and fooling the people, green groups have taken tricks from the play book of that great trickster and circus master, P. T. Barnum.

The Greens long ago learnt Barnum’s secret — you can say almost anything to the people with the knowledge that someone is eventually going to believe it.

Kangaroos are an easy target for environmental groups on a fundraising drive.

I could walk down the main shopping centre in any capital city dressed in a fluffy kangaroo costume and claim to be raising money to ‘Save Skippy’ and I’d be sure to fill my bucket with donations in a matter of hours.

For animal rights activists to suggest that all levels of government would actively work with the rural sector to recklessly destroy an iconic animal without any consideration for the consequences beyond profit only demonstrates the level of extremity their movement has reached in the quest for publicity.

Simply put, these claims are not supported by either the quantitative data collected each year or the anecdotal information across the bush.

At a time when there is a national debate about the editorial integrity of taxpayer funded news and information sources, it is disappointing that a political pamphlet masquerading as a research paper could be so recklessly published by two of our universities.

According to The Conversation website, the research for the ‘Kanganomics’ article was partially funded by the International Fund for Animal Welfare, which has a clear political agenda and can be selective about its use of facts and data in order to argue its case.

When it is clear there are false claims, they must not go unchallenged.

In 2014, RIRDC studied public perceptions to improve the humaneness of commercial kangaroo harvesting. (5)

The sample comprised 1050 participants (49 per cent male, 51 per cent female) with ages ranging from 18 to 89 years. Sixty seven per cent described their current residential circumstances as residing in a metropolitan area of a major city (over 100,000 people). (5)

The final report concluded that respondents believed if kangaroos are to be killed, it should be done by a professional shooter and the carcass should be used. (5)

It found that the respondents believed commercial harvesting is an acceptable form of kangaroo management, as long as it is done by professional and skilled shooters with the suffering of kangaroos minimised and the most humane methods employed. (5)

This report provides hope that solid facts and figures, which are explained by industry and government, can gradually dispel the myths and mistruths of the environmental movement.

It demonstrates the Australian people can see beyond the white noise of fringe activists.

Because, as the saying goes, you can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.

Sources

(1) https://theconversation.com/kanganomics-its-not-worth-killing-kangaroos-43550

(2) http://www.environment.gov.au/system/files/pages/d3f58a89-4fdf-43ca-8763-bbfd6048c303/files/kangaroo-statistics.pdf 

(3) http://www.awt.com.au/wp-content/uploads/2009/12/GHG_Roo_paper.pdf

(4) http://www.ies.unsw.edu.au/sites/all/files/page_file_attachments/Cooneyetal_final_forcirculation.pdf

(5) http://www.rirdc.gov.au/research-project-details/custr10_KAN/PRJ-004103

Rural Weekly Op-Ed – “White Paper delivers support that is needed and deserved for family farms”

8 July 2015

There has been a lot of analysis and opinion splashed across the media in the days following the Prime Minister and Agriculture Minister officially launching the White Paper for Agricultural Competitiveness at a Victorian dairy farm at the weekend.

There will be ardent supporters of the Federal Government’s rural blueprint and there will be critics.

But either way, we should take stock from the fact that people across Australia are finally really focussing on the ever-growing contribution our agriculture industry makes to the national economy and the mammoth potential facing this sector in the coming decades.

Forced to take a back seat during the mining booms over the past two decades, we are fast approaching days where agriculture will be once more raised in public prominence.

Through the delivery of the 2015-16 Budget, White Paper for Northern Australia and White Paper for Agricultural Competitiveness, our Federal Government has delivered more for Australian agriculture in the past three months than any other government has delivered in the previous three decades.

International economic drivers of farm gate profitability, such as world prices, subsidisation and protectionism, are outside Australia’s control.

But as one of the world’s largest exporters of agricultural product, Australia must never shy away from making home grown, strategic improvements to its competitiveness.

The $4 billion package announced on Saturday will ensure Australian farms become smarter, stronger and more competitive to exploit Australia’s agricultural comparative advantage.

The White Paper recognises the central importance of developing strong export markets —and it is something we want to maintain as well as build to provide greater profits back to the farm gate and to the nation.

When the Abbott Government took office in September 2013 a 400 kg feed on steer at Gunnedah would have got you $680; now it will get you around $1265.

A 20 kg lamb would have returned $85; it now returns $125.

Feed barley has increased by 21 per cent to around $295 a tonne and the value of a 180 kg bale of wool has increased by 12 per cent, to $2,190.

Since the change of government the prices of soft commodities have now had one of the greatest turnarounds in our nation’s history, by reason of demand from Asia and other markets including the Middle East, a low dollar and good management by government with free trade agreements with China, Japan and South Korea and six new live export destinations.

This is also in no small measure due to the backgrounds of the men and women who make up our government.

Roughly half of the Cabinet has direct, practical involvement in agriculture and family-based primary industry.

Aside from Barnaby Joyce, there is Trade Minister Andrew Robb, who has held senior positions at Cattle Council and the National Farmers’ Federation.

Indigenous Affairs Minister Nigel Scullion was a commercial fisherman. Deputy Prime Minister Warren Truss and Ian MacFarlane were successful grain growers before entering politics.

Health Minister Sussan Ley spent her early married life on her husband’s family farm.

Even Cabinet Ministers better known for their Northern Sydney electorate, Communications Minister Malcolm Turnbull and Treasurer Joe Hockey, own sheep and cattle properties at Scone and Atherton respectively.

Each of these key decision-makers understands the importance of the land to people across the bush, and alongside the rest of the cabinet, they are now delivering for the bush.

Finally, we have a Prime Minister who is truly a friend of the bush. I have seen this first hand as he has comforted landholders in drought-affected regions.

Whether through better genetics, improved pastures or new technologies, Australia’s farmers and producers have a range of ever increasing options at their disposal that provide opportunities to evolve our beef industry from a mere commodity to a premium product.

By dedicating significant government funding and resources to addressing future market opportunities, supply chain transparency and research and development in this White Paper, the Federal Government is taking a confident step forward to address the fundamentals that will keep the family farm gate secure for years to come.