Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry
It gives me great pleasure to be here today to once again open the Australian Women in Agriculture’s annual conference. Time has flown since the conference in Darwin last year and much has happened and a lot has been achieved in that time.
Let me begin by saying that the Coalition Government is firmly committed to regional Australia and the people and industries of regional Australia. As such, our policy agenda is focussed on ensuring that Australia faces the future with confidence and certainty.
As a nation, we are operating in an international environment. This means we have to be strong, economically competitive, environmentally sustainable and technologically advanced. We have to look to the future – not to the past as some in politics would try to have us believe.
It is a truism to say that it is a mixed picture in regional Australia – it is inherent in a country as vast as ours that while some people are enjoying a good season, others are enduring the worst drought or floods on record. This year is no different with drought in Western Australia and parts of Queensland while other areas are till recovering from flood damage caused earlier in the year.
At the same time, our lower dollar has proved a bonus for our export industries with the increase in exports contributing a to a trade surplus of $707 million for the last financial year, rural commodity exports increasing by 21 per cent. This increase in exports is estimated to have increased farm incomes across agricultural industries by 34 per cent in the financial year ending June 2001 and is projected to increase by a further 16 per cent this year. Coupled with this, interest rates are at historically low levels.
It is a long time since we have experienced such a combination of favourable circumstances and it has given many a much needed boost in confidence. When we talk about rural and regional Australia, it tends to conjure up images of:
- primary production and the vagaries of the weather;
- commodities and the cyclical nature of international markets;
- the “unlevel” playing field; and
- farmers as mainly being rugged, tough men.
While this is still the enduring image, I am sure it will not come as any surprise to you here today that this is only part of the picture. It is this traditional image that I want to challenge you with here today. It is not only men in rural Australia who are making a difference; traditional farming is not the only industry; and we do not always need to be price takers in the international market. Why I say this is that over the past few months I have had the opportunity to see at first hand what is happening in our farming, agribusiness and food industries throughout Australia.
There is very clear and abundant evidence that the old image simply no longer holds true.
In terms of rural women and their place in our industries, the Rural Industries R&D Corporation’s Women’s Awards showcases what women from throughout Australia are doing to shape the future of rural and regional Australia.
This years State winners Rhonda Tonkin from Western Australia, Francis Bender from Tasmania, Jeanette Gellard from South Australia, Sharon Munnerley from Victoria, Dianne Gresham from Queensland, Jon-Maree Baker from New South Wales and Carmel Wagstaff from the Northern Territory.
One of the very pleasant and memorable events during the year was the presentation of the RIRDC/Women’s Weekly Rural Women of the Year Awards. It was my pleasure to present those awards and I am always highly impressed at the talented and diverse range of women we have in rural Australia. I am sure that next year’s awards will be no less exciting and I look forward to meeting those women who come forward.
On this note the I would remind you that Minister Truss recently recently announced the call for nominations for the 2002 RIRDC Rural Women’s Award with applications closing on 15 October 2001, World Rural Women’s Day. In the interests of furthering the agenda of rural women I would encourage you to either nominate yourself or nominate someone you think is deserving of recognition in their chosen field.
On another front that highlights some of our innovative entrepreneurs in agribusiness, the New Industries Development Program has attracted a wide range of applicants seeking assistance from the Government to further their businesses.
The latest round of successful applicants recently convened in Canberra for a seminar to share their experiences in getting their businesses started and the problems they had to overcome.
Among the successful applicants for the New Industries Development Program Pilot Commercialisation Projects are Gelair Pty Limited and Qew Orchards.
The directors of Gelair Pty Ltd , who are tea tree growers, recognised they were no longer able to demand premium prices for their tea tree oils due to a surplus on the market. They evaluated the opportunity to use the anti-microbial properties of tea tree oil as a disinfectant for air. Subsequent R&D led to the development of a biodegradable gel for air conditioning systems which releases micro quantities of tea tree oil to control bacteria, yeasts and moulds.
Gelair Pty Ltd, with the help of the New Industries Development Program has now successfully commercialised the product into selected parts of the high value hospitality and super/mega yacht markets.
Qew Orchards from Tasmania have identified an under supplied health food market for sulphur-free dried apricots. In partnership with a small food processor, Qew Orchards have devised a unique processing technique to value add a second grade product that would otherwise be sold on the domestic market with decreasing returns. The quality and distinct taste of this apricot product has triggered further investigation into the lucrative snack food market. This project also has wider implications, as it shall provide other Australian apricot growers with an alternative outlet for their low grade fruit.
These are just two of the many pilot commercialisation projects that have demonstrated that with determination and motivation, targeted government support and a willingness to put in the hard yards, you can achieve almost anything.
The Rural Industries R&D Corporation’s Women’s Awards and the New Industries Development Program highlight the work and achievements of individuals and their businesses in rural Australia. They all deserve our congratulations and support in their endeavours. They are adding value to our rural communities and building the confidence and certainty that is needed for ongoing investment, employment and growth in rural and regional Australia. These individuals are vitally important components of a much bigger picture that comprises our food and fibre industries.
When I talk about the food industry I mean food that is “consumer ready” – the food we buy in the supermarket. Most of the raw ingredients for this “consumer ready” food is sourced from rural and regional Australia and much of it is processed in regional Australia with many women and men involved in all sorts of ways.
We don’t, however, think of ourselves and regional Australia as food producers – we still tend to think in terms of farming. That has to change if our food industry is to maintain and then improve its competitive position in the global market.
Agricultural commodities and processed food products have long been internationally traded. The composition of that world food trade, however, has changed significantly in recent years. Our research shows that since 1980, the international trade in processed food has increased rapidly, while trade in bulk agricultural commodities has declined. In 1985 trade in processed food products accounted for 50 per cent of global agricultural trade. Today it accounts for around 75 per cent of that trade and is growing at twice the rate of trade in primary products. Given this growth, it is clear this industry should be at the forefront of Australia’s future opportunities.
Rapid globalisation of food processing and retailing is the major issue facing the industry today. We have to try and understand the impact of globalisation on our industry and how the world is now virtually one market for food products. This globalisation is being fuelled by rapid movements of information, capital services and goods, transport and finance regardless of borders and barriers.
Historical comparative advantages are no longer sufficient when competing against imports in our domestic market or when trying to capture new opportunities in export markets. Consumer tastes are changing rapidly as we become more sophisticated, affluent and discerning in seeking food that satisfies our needs, desires and expectations. The impact of continually changing consumer tastes can be seen by the fact that of the 24,000 packaged food products currently on Australian supermarket shelves, 75 per cent are new within the last five years.
Food safety and consumer confidence in food is also being challenged with crises such as BSE and Foot and Mouth Disease in Europe. These issues and figures are important in challenging our thinking about the changing shape of world trade; Australia’s position in the global market; where our industries fit; and what is happening in rural and regional Australia.
They also highlight the importance of processed consumer and intermediate food products in world trade and how we, as a small trading nation, need to respond to that challenge.
Food products, including processed food, beverages and ingredients, and fresh product such as meat, dairy and horticultural produce account for 43 per cent of total retail turnover in Australia and around 15 per cent of Australia’s merchandise exports.
Australia’s food exports have averaged a growth rate of 7.7 per cent a year over the past decade to reach $14 billion in 1999-00. This may sound encouraging. We need to bear in mind, however, that we account for only 2.7 per cent of the global trade in processed foods. And that while our major competitors are rapidly increasing their share of the market, our share of the market has remained static over the last few years – despite the substantial increase in exports we have had in our dairy and wine industries in recent years.
In terms of processed foods and beverages, the industry is Australia’s largest manufacturing industry with an annual turnover of more than $49 billion. It comprises around 3,500 firms and employs more than 166,000 people. Moreover, around half of Australia’s processed food and beverage firms and 40 per cent of employees are located in rural and regional areas. Clearly, the food industry is a vital part of rural and regional Australia as an important field of business and as a major employer.
To help ensure the future success of the food industry and to help build its contribution to rural and regional Australia, the Government, in partnership with industry, has been developing a National Food Industry Strategy. We have been developing this Strategy through our Action Agenda Process since March this year. Although much of the research and analysis, that underpinned the process, commenced much earlier in 2000.
The Prime Minister tasked the Minister for Agriculture, Fisheries and Forestry, the Honourable Warren Truss, to develop this strategy in light of industry concerns regarding the impact of globalisation on the food industry. To develop recommendations for the Strategy the Government set up a National Food Industry Advisory Committee, under the Chairmanship of the Mr Truss. The committee is comprised senior representatives from the major segments of the processed food, beverage, horticulture, and related service industries.
The aim of the Strategy is to coordinate and focus activity aimed at responding to the challenges and capturing the opportunities arising from globalisation. As Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry and with responsibility for the food industry, I have undertaken an extensive consultation program throughout Australia to gather information to feed into that Strategy. This has involved a wide range of consultations with people in the industry throughout Australia and feeding their comments into the process.
As I have moved around Australia, the people we have talked to were very encouraging. They have ranged across the board from organic jam makers, olive growers, mango growers and icecream makers to abattoir owners and from confectionery makers and ready-to-eat-meal producers to gourmet pies and cheese makers to speciality hams and condiment makers, to name just a few. These enterprises have included businesses in all shapes and forms, from the cottage industry to the one-off exporter, the committed exporter and the multinationals that are concentrating on our domestic market.
From what I have seen on my travels and through the work done on the Strategy to date it is clear the food industry is ideally placed to expand as both a supplier of raw ingredients and fresh foods, and as a manufacturing base for processed foods.
In the next few weeks, Minister Truss will be taking the final plan to Cabinet for decision and we can expect an announcement shortly thereafter. The development of the Strategy has been a hugely challenging project and will continue to be for many years to come as we deal with globalisation of the food industry.
The market reality is that while in Australia two major retailers have 70 per cent of the market, internationally Wal-Mart and Carrefours are the two largest global food retailers. Wal-mart now operates in ten countries and Carrefours and Royal Ahold operate in 28 and 27 different countries respectively.
Australia is not immune from this trend. We have recently seen Aldi, a Germany company, enter the Australian market, and establish itself at selected locations. Like the multinational processors, the major international retailers are building long term, relationships with suppliers from around the world. These suppliers are carefully selected and must comply with proprietary quality assurance and food safety standards. These exclusive supply chain agreements allow the retailers to maximise their returns from efficiency gains throughout the supply chain.
The trend towards retailer driven, rationalised and exclusive supply arrangements is of particular significance to Australian fresh and processed food suppliers. With the number of European retailers in Asia growing, it is important for Australian suppliers to form strategic relationships with these global retailers. With the headquarters of many of the major global retailers located in Europe, however, it is difficult for Australian firms to form these relationships. The issue for those in the industry, you as food producers, and we as the Government is – what do we do about it. That is what the Strategy is largely about.
Before I finish, I want to go back to where I started with my comment that a lot has happened in the last year. The landscape is changing in rural and regional Australia. This is evident to me through such things as the RIRDC Rural Women’s Awards and the applicants coming forward through the New Industries Development Program which demonstrate the diversity and potential of our food industry.
As I said these are all examples that challenge the traditional image we have of rural Australia and illustrate the changes that are occurring. As part of this, I am proud to say that in the past year we have continued to work to put more women onto government boards.
Early in the year I had the pleasure of appointing Dr Jane Wilson as the Chair of Horticulture Australia Limited and also appointing Dr Elizabeth Dennis and Sandra Hook to that Board. As Horticulture Australia Limited is a now a private company, further appointments to that Board will rest with its industry members. More recently, I have appointed Ms Bobbi Brazil as Chair of the Land and Water R&D Corporation and re-appointed Ms Bridget Jackson as the Chair of the Cotton R&D Corporation for another three years.
The quest to find suitably qualified women to fill these and other positions goes on and I urge you all to encourage women to come forward. We have also come a long way in terms of the relationship that now exists between AWiA, the NFF and some of the State farm organisations. We all know how hard it has been for women to take a position within these organisations for a variety of reasons.
It is encouraging to now see a strategy being developed between AWiA and the NFF to overcome these problems and become more involved and visible within the NFF and its State member organisations. This has been an evolving process of building relationships and understanding from the time AWiA first joined NFF in 1996 as a member with observer status to now being able to actively influence some of its agenda.
On another front, as Parliamentary Secretary for Agriculture, Fisheries and Forestry, I am pleased to say that through my portfolio, AWiA has been granted $325,000 in the latest round of FarmBis funding to provide training to AWiA members in leadership, business and industry knowledge and to establish reference groups.
I congratulate AWiA on showing leadership in pursuing this exercise and look forward to seeing the results. I wish you well in your conference and look forward to being informed of your conference’s outcomes and your organisations future initiatives and directions.