|
Bruce Dick
CEO of Rabobank
Australia & New Zealand
Despite some immediate
challenges – including
increases in farm input costs and
interest rates and a softening in
certain commodity prices – the
long-term outlook for Australian
agriculture is overwhelmingly
positive, according to the
Australasian head of the world’s
leading food and
agribusiness bank.
 Bruce Dick, CEO of Rabobank
Australia & New Zealand, says
Australian agriculture has entered
the second half of this decade with
a number of crucial factors
balanced in its favour.
Australia’s quality farm operators
can expect to benefit from the
resulting opportunities.
“Global economic growth remains
firm and, most importantly,
demand for many of Australia’s key
food and agricultural commodities
is strong and improving,” he says. “Australia continues to benefit
from its status as a preferred
trading partner, with an excellent
reputation for reliability and quality
produce, while future bilateral and
regional trade agreements,
including with China, are likely to
have a significant longer-term
impact for the sector.
“Added to this, there is a generally
positive outlook for agricultural
production this year, despite
continuing dry conditions in some
parts of the country, such as central
Queensland and parts of southern
New South Wales.”
With these factors in place,
Rabobank’s view is that Australian
primary producers have enormous
potential for future growth in
global export markets. “As a global food and agribusiness
banking specialist, operating and
researching in 38 countries around
the world, we are well placed to
evaluate the international market,
and our view is certainly that
Australian agriculture has a strong
future in international export
markets,” Mr Dick says.
The expectation for continuing
strong global growth was a view
supported by this year’s recent
Federal Treasury budget forecasts.
Australia’s economic growth – GDP
is forecast to grow by 3.25 per
cent in 2006-07 (up from 2.5 per
cent this financial year) – is
expected to occur off the back of
strong global demand for
Australia’s commodities.
Export
earnings are forecast to strengthen
by seven per cent in 2006-07 (up
from two per cent in the current
year) with the global economy
expected to remain strong.
Add to this, says Mr Dick, emerging
global trends such as world
population growth and increasing
urbanisation and westernisation in
developing countries, particularly in
Asia, and the stage is set for strong
growth in demand for Australia’s
agricultural produce.
“It is predicted that the world’s
population will grow from today’s
figure of around 6.5 billion to eight
billion by the 2020s. And much of
that growth will occur on our
geographical doorstep - in the developing countries in the Asian
region, including the emerging
economic colossus of China,”
he says.
“Those extra 1.5 billion people will
need to eat and wear clothes and
these countries simply won’t have
the resources and capabilities to
satisfy all their domestic demand.” Moreover, says Mr Dick, urban
populations in these developing
countries are forecast to double. “This has significant implications
for our agricultural sector because
it will result in consumers who will
not only have higher disposable
incomes, but who will tend to
spend a greater proportion of that
income on food and clothing and
to eat more meat, dairy and
processed products,” he says.
“In the longer term, this trend will
also result in consumers who
become more discerning and
demanding about the food they eat
and the clothes they wear. They will
become more concerned about
factors such as the taste and
freshness of food, food safety,
quality of produce, animal welfare
and the environment.”
The good news is that Australian
producers are well placed to step
into the breach to help meet
increased world demand for
agricultural products, according
to Rabobank. “We certainly have many factors
going in our favour,including not
only the quality and consistency of
our produce and our good record
as an existing trading partner, but
also our geographic proximity to
the developing countries of Asia,”says Mr Dick.
“Also, unlike the EU and the United
States, we have a relatively small
domestic population so a major
focus of our agricultural and
agribusiness industry is on the
export market.”
Mr Dick says it is important for
Australian farmers totake a longterm
view in planning and running
their businesses.
“Agriculture is a long-term
business and it is always going to
be subject to certain variables
along the way,” he says. “There are obviously a number of
issues that challenge the industry
including seasonal conditions, fuel
and fertiliser prices and
fluctuations in currency, interest
rates and commodity prices. These
issues will impact us and cause
difficulties, but it is important to
recognise that they have a
comparatively short-term effect
and that our major focus should be
on the long-term, on the major
over-riding drivers that are shaping
the future.”
Mr Dick says Rabobank views
Australian primary producers as
among the best and most
professional in the world.
“Agricultural operators here are
increasingly sophisticated and
professionalised in their approach,
with the successful operations
generally becoming larger in scale.
Today’s successful farmers are as
skilled at business management as
they are at farming itself. They are
just as likely to be found sitting
behind a computer as they are
behind a tractor”.
“Growing and supplying food and
agricultural produce is one of the
most important jobs you can have
and Australian farmers are among
the best at it.”
www.rabobank.com.au |
