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Minister's CEDA speech September 2007
Presentation to the Committee for Economic Development of Australia (CEDA) Queensland Branch
18 September 2007
The Honourable Tim Mulherin, MP, Minister for Primary Industries and Fisheries
Member for Mackay
10-billion-plus reasons to focus on the future of Queensland's agriculture
Ladies and gentlemen and members of the panel, thank you for the opportunity to speak with you this afternoon.
Today also provides me with the opportunity to showcase quality Queensland food and wine as Madonna has indicated.
Every mouthful of your meal, every sip of your wine, is the end product of Queensland´s world-class agribusiness.
To be in agribusiness today means you can be a world-leading scientist living and working in a metropolitan centre; it means you can be on the land in the remote far west of this state applying the latest technology to your cattle breeding program, running an aquaculture business along our pristine coast, be running a family vineyard, or in fact being a banker based in Brisbane.
The opportunities and the diversity of those opportunities grow every day.
Fifteen years ago however agriculture was run by government marketing boards; it was a controlled and restricted industry sector, it was a business model that would be laughed at today.
Visionaries, like my predecessor the late Ed Casey as Primary Industries Minister, knew that controlled government marketing boards were the sure death knell of agriculture in a modern and changing global market.
They were abolished.
Today, agriculture is free to respond to the opportunities and demands of a global market.
Making such decisions required some hard thinking, required frankness of discussion, required a bluntness of thought, and required some tough and occasionally brutal decisions.
Today, we have a new set of challenges, new global demands, new global expectations, and new global opportunities.
This nation and this state no longer ride on the sheep´s back.
But make the right decisions, set the right priorities, and invest in the right areas, and we will ride on the product of sun, water, soil combined with science innovation and entrepreneurialism.
Agriculture earns Queensland more than $10 billion at the farm gate annually, with some $9 billion more in indirect benefits to Queensland.
These are not small numbers.
The future of this Agribusiness sector and the future of our trade potential, rest very much in the hands of industry in partnership with the Queensland Government and my department: the Department of Primary Industries and Fisheries.
Together we set the agenda, provide the policy direction, the policy leadership and the policy framework, and establish and supply new and expanded market opportunities.
Together we safeguard industry through biosecurity.
Together, we have cemented an international reputation of 'clean and green'.
And through joint investment, it is our responsibility to strategically invest in science and research that returns the maximum profits to the agricultural sector and the maximum value to the taxpayer.
It´s about the Department of Primary Industries and Fisheries being an economic development agency.
Australia-wide, public investment in R&D is responsible for more than a third of productivity growth in agriculture and arguably it is even higher in Queensland.
My department invests in science and research facilities the length and breadth of this state; in fact the taxpayer owns 41 stand alone DPI&F research facilities and a further 87 service centres.
My job is to ensure the best investment of my department´s $333 million annual expenditure; to ensure the best and most profitable return for the taxpayer and industry and to ensure that investment paves the way to attract additional investment from industry and from the Commonwealth to expand our impact.
Two months ago CEDA released a report that outlined the 20 greatest global challenges for Australia; challenges that must be addressed by all levels of government and industry if we are to securely position our nation for the future.
Among the top 20 challenges that Australia must address were:
- our terms of trade
- water security and climate change
- food security and biotechnology
- bio-fuels and alternative energies
- workplace skills
- investment in science and research
- biosecurity threats.
Each challenge relates wholly or in part to the core business of the Department of Primary Industries and Fisheries and each of these challenges drives how the department prioritises its investment.
Unfortunately however, the general perception of the Department of Primary Industries and Fisheries is often askew.
There is a stereo-typing by some, that DPI&F is somehow cemented in a bygone era... like some sort of nostalgic government relic that preserves our love of the outback romanticism that built modern Australia.
And there is a stereotyping by others that DPI&F is mostly or exclusively relevant to people living on the land or involved in fisheries. Neither perception is correct.
I'm not going to stand here today and give you some sort of meaningless political statement that we have each and everyone of the challenges perfectly in hand that there´s nothing more to do; that would be a nonsense.
Our task is to make sure we are on the path to meeting each of these challenges and meeting them in time.
The CEDA report by Professor Keith Smith highlighted that "a nation can have large mining or agricultural industries and still prosper through innovation."
His report emphasised that it is the resources sector - mining and agriculture - that can not only fuel economic growth, but help make Australia a more innovative and diverse economy.
And he was very particular too about how we should do that.
We should build off our natural strengths rather than try to mimic what resource-poor countries have done such as their focus on investing in electronics and ICT.
Veterinary and bio-medical innovations are a natural complement to strengthening our agricultural sector.
There are calls too, including by the National Farmers Federation, for a greater embracing of genetic technologies. This is a controversial and often emotive issue. However to be competitive, our producers must have every global advantage. So long as safety and environmental and ethical safeguards are maintained.
The global market is now more affluent, more competitive, and more discerning. It can demand a product that is developed conventionally, organically, or through gene technology. Are we prepared to compete in this field and how far are we prepared to go?
The Queensland Government supports the pursuit of gene technology and GM (genetically modified) crops. We must not fall behind the rest of the world.
GM foods will provide an enormous boost to productivity in our State economy, they can be more efficient, better meet market demands, and they drive both the sustainability and profitability.
One of the strongest weapons in the artillery to adapt to climate change is genetic modification; it allows us to develop greater drought-resistant crops, allows us to develop crops that are less reliant on pesticides and herbicides, allows us to develop water-efficient crops, and allows us to develop greater-yielding crops often with greater nutritional value.
But we need national consistency; and a national framework. And our GM guidelines and safeguards must be both internationally accepted and understood. We cannot afford to damage our clean and green credentials.
Before we discuss how to meet these challenges, let´s just for a minute take stock of where agriculture and agribusiness is today.
Today there are fewer farms. But they are larger farms than 20 years ago. And there are now fewer people working in agriculture, yet the economic value of agricultural production has sky-rocketed. Often there is a perception that agriculture and the value of agriculture has gone backwards. Well it hasn't.
In fact, using 2002-03 dollars, the value of agricultural production in Australia has actually almost tripled over the last four decades; tripled in real terms from $10 billion in the mid-60s to $27 billion in 2003-04.
In truth, agriculture and agribusiness are much more important to our export economy than our domestic economy.
While it accounts for 4% of our GDP (gross domestic product), agricultural products represent 22% of the nation´s entire exports. And the value of these exports has also tripled, in real terms, since the 70s. It´s a similar story at a state level; in Queensland agriculture accounts for a quarter of our exports and contributes more than $10 billion annually to the state economy.
That is 10-billion-plus reasons to bank on agriculture.
Agriculture, both in production and value has experienced growth in Australia; a growth that has been driven almost entirely by productivity gains.
In fact, according to recent ABS statistics, productivity growth in the agricultural sector over the last 20 years was three times more than the rest of the economy.
Farmers themselves are now increasingly focused on the consumer; more integrated into the global food and fibre chains and more aligned to the push by major food and fibre processors and retailers to reduce chain costs and uncertainty.
That too is driving greater market segmentation such as organic foods, low-fat foods, high-end gourmet products or foods for Asian or Middle Eastern markets. And now we have agricultural production for energy or biofuels.
The pursuit of biofuels puts the world on the cusp of a great economic challenge: the challenge of growing crops for food versus growing crops for fuel. Its given rise to a new economics: agflation.
What will happen to the price of food and our access to food when a farmer knows they can be paid more money for their crop if it´s used in the biofuel industry rather than the food industry?
So, standing at that cross-road, which way will we turn?
Should we let the market run? Should we as a State put more resources into R&D? These are our challenges.
The structures and global demands that govern and dictate what we produce have changed and will continue to change.
It stands to reason therefore that the Department of Primary Industries and Fisheries must also change.
To ensure agriculture remains a vital cog in Australia´s economic engine room, new national structures and alliances are being spearheaded across the nation.
National Centres of Research Excellence are developing where individual states take the national lead for commodity or sector-based research, development and extension.
In collaboration with the Government, the CSIRO and The University of Queensland, have already initiated co-investment of some $290 million in major new science facilities.
These include the Boggo Road Eco-Sciences precinct, the Food and Health Sciences precinct, the Queensland Centre for Crop Development and the Centre for Advanced Animal Science.
This is a significant investment.
Ladies and gentlemen, so far this afternoon I have mapped out the changing face of agriculture.
I have mapped out: the changing global demands on agriculture; the changing global pressures on agriculture; mapped out the challenges that must be met for our long-term security; mapped out the national framework; mapped out the Bligh Government´s commitment to using smart-science to drive a smart agricultural sector.
And I have flagged the wealth of investment opportunities in agriculture that are there now for the taking or that are on the horizon for the making.
Just remember that in 13 years time, in 2020, there will most likely be another billion people in the world to feed and to provide fuels for.
The economies of developing nations are growing at twice the rate of developed nations. Their spending power is expected to increase by $4 trillion... to $9 trillion... in the next 10 years alone.
Declining oil reserves have an effective life of 50 to 100 years and depleting coal reserves, a life of 200 years; the search for alternative fuels - for biofuels - is on in earnest.
All this points to one thing:
If there are 10-billion-plus reasons to bank on agriculture today, get our strategy right, cement ourselves in global supply chains, there will be 20-billion-plus reasons in the very near future.
And that brings me to my plan; my footprint, to position Queensland´s primary industries and the Department of Primary industries and Fisheries for meeting the challenges in partnership with industry.
As the chief investor for agriculture for this State, I have requested my department review exactly how we should be doing business in Queensland, how, in our capacity as an economic development agency, we can best maximise the profitability of primary industries.
There will be a frankness of discussion as we become much more strategic in determining how and where we invest for the food and agribusiness of the future.
As part of the Bligh Government´s drive to make Queensland the knowledge capital of Australia, we aim to create a world-class agricultural science network across Queensland; a network of facilities that work hand-in-hand with educational institutions, facilities that attract world-class scientists, facilities that build on those areas of agricultural science, whether it be for the food, fibre or the bio-medical industry, where we can be world-leaders.
It is my intention to continue the development of a science network of world-class facilities across Queensland, starting with research facility for Tropical Science and Biosecurity in North Queensland consistent with my Government´s goal to make North Queensland the nation´s new industrial powerhouse.
We will do this as we have done with the Boggo Road Eco-Sciences precinct: we will co-invest with universities, CSIRO and other research partners in high priority world-class science infrastructure.
It´s about building on our strengths.
It´s about partnerships.
I also want to continue my drive to change the ´faces´ in agriculture.
We need more young people; young people with new ideas, new skills, and a renewed enthusiasm.
But we also need new ways of ensuring continued access to the experience and wisdom of our long-term staff as they retire and seek lifestyle change.
Consistent with the goals of the Blueprint for the Bush, we will identify opportunities for co-location of the department´s research facilities with education and training institutions. We will look at how co-location will attract and better skill more young people into agribusiness.
As we build our world-class science network we need to ask very simple questions in relation to the changing global market place and global demands:
- Are some services and some investment simply being maintained because they have been historically provided?
- Are some services needed for tomorrow that are not being provided because historically they haven't?
- To what extent does technology provide new, more efficient and more informative ways to provide our services?
- How do we decide where to strategically invest the valuable research and science dollars?
- Should our investment in research be across the entire spread of industries and across a vast real estate network, or would it be better targeted through Centres of Excellence at those areas where Queensland can be a national or international leader?
- Would the creation of Centres of Excellence attract more private investment in research and more commercialisation opportunities?
I said some tough decisions would have to be made. And that´s exactly what I am flagging today.
We are making an enormous investment of taxpayer dollars in agricultural science and research; we owe it to the taxpayers and we owe it to industry, to make sure that investment returns a maximum profit and a maximum level of sustainability to the industry.
Your challenge is to be a partner, a leading partner in making Queensland the knowledge capital of Australia by 2020, and be a partner in the agricultural science boom that will drive that.
The global drivers, the global challenges, and the global opportunities are there for all to see.
Don't ignore them.
Because, rest assured, this State Government has not!
Thank you.
