I wrote last year about the alarming and strategically dangerous state of our national fuel oil reserves, in as much as we hardly have any. Bill Shorten the Leader of the Opposition in a recent speech told his audience that, “Right now, we have just 23 days of jet fuel, just 22 days of diesel and only 19 days of automotive gas.(petrol)” He added that when Prime Minister he would fix it. The Prime Minister, Scot Morrison, has not mentioned the problem, maybe he doesn’t want us to know?
Both of our would-be leaders are more interested in the show-time of denigrating each other and so winning the upcoming election — the security of the nation runs a distant second to getting their hands on the keys to The Lodge and even better, Kirribilli House.
‘When you’ve got them by the balls their hearts and minds will follow.’
Australia and its sophisticated agricultural industry have to decide whether they want to be a feeder of others, or be fed by others. Don’t laugh at that. Of course the world can feed Australia— it’s already started as we increasingly become more reliant others for food. We have no more people in this country than there are in a couple of big Chinese cities and we are an attractive proposition to feed, if only for access to our resources and for what food we can produce that others can’t. I read somewhere recently that China would only have to increase its horticultural production by about 3% and it could feed Australia. Think about that and the global fresh food trade. There are Egyptian oranges for sale in my town. So how important are we to China and how important is China to Australia? You may be surprised.
Over recent times as Australian agriculture has endured droughts, poor prices and incompetent governments; amid the chaos there have been two major overriding topics for discussion.
The first has been trying to separate the rumours, the gossip and the chit chat from the truth regarding the extent, the size of Chinese investment in Australian agriculture, in land, as distinct from agribusiness or food processing.
There is a body of opinion that claims Chinese interests, including Sovereign Funds have made substantial purchases of land in Australia, using a variety of investment vehicles, which have enabled them to avoid scrutiny by the Foreign Investment Review Board (FIRB).
We have the figures from the FIRB and we name who the biggest investors in Australia agriculture have been over recent times and the results will surprise you. China is at the bottom of the list, below Hong Kong. So why the public and in some cases political interest in China who ‘officially’ appear to be a minor investor? Is it xenophobia, fear, nationalism? — they all mean the same thing really. Do we fear China and is that because we don’t understand them? Whose fault is that?
These are difficult questions for us as a people and as an industry. It is a far more serious question for the media, and I believe the media should shoulder a great deal of the blame, because they have wrung every bit of emotion they can out of China and Chinese investment in Australia, giving voice to rumour and innuendo. Yet the records show that the media have been at least less than diligent and probably lazy in failing to report who the big, billion dollar plus, non-Chinese investors have been in Australian agricultural land over recent years.
The second big question is, forgetting agriculture, can we now manage, as a country, without China? We have all but exported our manufacturing base, everything from engineering, to clothing to hardware to food processing — you name it, what we once made ourselves we now get from China.
If it’s ‘Made in China’ it’s designed to be affordable. The more we buy from China the more dependent we become on them and the more vulnerable we are as the alternatives become uncompetitive.
The resource boom of the last last decade should have made Australia strong but there’s a fly in the ointment, Barclay’s Bank Kieran Davies reports that Australian household debt is equal to 130% of Gross Domestic Product (GDP) this compares to an average of 78% average across the advanced world making us more vulnerable than most to another financial crisis.
So we’ve spent the boom on paying ourselves wages and salaries big enough to build the biggest houses in the world with ‘entertainment centres’ and a bathroom for every resident, double garages to hold the boat and the dual cab 4wd ‘trucks’. Enough left over to holidays to exotic destinations and the like — instead of spending our money on our country, on the infrastructure future generations will need to make us world competitive.
China is now the world’s largest economy. America will fight them for that position — but no matter what happens, China’s influence on the Australia will continue to grow.
Australia’s challenge will be to find the point of balance in our relationship between our greatest ally, America, and the country we cannot manage without — China.
I was reading just today that the view is commonly held in the world of Geo-politics that the 21st century is ‘The Chinese Century’There have been numerous articles in the ‘Global Farmer’ about China and the challenges that country faces in feeding it’s people today and more importantly the problems it will face in the future as it becomes home to a third of the worlds population. China is the world’s biggest wheat grower and something like 70% of that area is irrigated. Like many areas in the world the extraction rate on the aquifers on which China relies is greater than the re-charge rate. Soon we will reveal what food China already imports.There are numerous articles on the www of China’s plans to build a canal from Tibet into China. A State engineer claims in can be done without pumping, which seems extraordinary. Perhaps that will solve their problems, but I gather there are many barriers, not the least being India and international conservation groups. See: The Globalist.The view is held that irrigated wheat is unsustainable in China and that the area of dry land wheat will grow and China will continue to buy wheat land in other counties where ever it can. With a rapidly ageing farming population in Australia, a large number of farms either for sale voluntarily or being pushed, and with Australian investors keeping their hands in their pockets and off their wallets, I don’t think a few extra dollars will deter either the foreign urban or rural land investor. In fact I think the measure is just plain silly and ignores reality and is a lolly for the anti foreign investor chatterati.The reality is that real estate, both rural and urban is for sale and there is nothing to prevent anyone from anywhere in the world from purchasing those assets. We have the most expensive houses in the world, don’t believe me well have a look at this article from Business Insider. So we have only ourselves to blame if we can’t afford our houses and others can.As for farming land in the next Global Farmer we will show how Australia is the second most expensive country in the world to grow a tonne of wheat, Canada believe it or not, is the most expensive.The following by Prof Dearing from Southampton UK has certainly helped me get a better perspective on what seem to be China’s voracious appetite for Australian real estate including our farming lands from the far south to the far north.
China farming boom has left ecosystems in danger of total collapse
More intensive agriculture has reduced poverty, but China’s environment can’t handle the pressure.
China’s push for more intense farming has kept its city dwellers well-fed and helped lift millions of rural workers out of poverty. But it has come at a cost. Ecosystems in what should be one of the country’s most fertile region have already been badly damaged – some beyond repair – and the consequences will be felt across the world.
This is part of a long-running trade-off between rising levels of food production and a deteriorating environment, revealed in recent research I conducted with colleagues from China and the UK. Yields of crops and fish have risen over the past 60 years at several locations we studied in Anhui, Jiangsu and Shanghai Provinces in eastern China. But these are parallelled by long-term trends in poorer air and water quality, and reduced soil stability.
You may ask if this a bad thing. After all, increasing agricultural productivity has been one of the factors responsible for lifting millions of rural Chinese out of poverty. Does it really matter that the natural environment has taken a bit of a hit?
Well yes. For agriculture and aquaculture to be sustainable from one generation to the next, the natural processes that stabilise soils, purify water or store carbon have to be maintained in stable states. These natural processes represent benefits for society, known as ecosystem services.
Throughout the latter half of the last century, these services were being lost relatively slowly through the cumulative, everyday actions of individual farmers. But the problems accelerated in the 1980s when farmers began to use more intensive methods, especially artificial fertilisers – and again after 2004 when subsidies were introduced.
Worryingly, in some localities, the slow deterioration has turned into a rapid downward spiral. Some aquatic ecosystems have dropped over tipping points into new, undesirable states where clear lakes suddenly become dominated by green algae with losses of high-value fish. These new states are not just detrimental to the continued high-level production of crops and fish but are very difficult and expensive to restore.
These natural processes are degraded and destabilised to the point that they cannot be depended upon to support intensive agriculture in the near future. The whole region is losing its ability to withstand the impact of extreme events, from typhoons to global commodity prices.
What can be done?
National policy must prioritise sustainable agriculture. This will mean big changes on the farm: fertiliser and pesticides must be applied in the correct quantities at the right time of the year, cattle slurry and human sewage must be disposed of properly, chemicals getting into streams and rivers must be reduced, and fish feed has to be controlled.
Unfortunately, this is easier said than done. Farmers are still generally poor, badly educated and ageing. Good agricultural advice is lacking and big cities still tempt the younger farmers away from their fields. All these factors mean that rapid action is unlikely.
The recent introduction of the Land Circulation reform policy, allows farmers to rent their land to larger combines. The policy is designed to overcome the inefficiencies of small farm holdings but it may not be taken up widely in the more marginal landscapes where potential profits are low.
All the evidence points to a need for a significantly improved system of information and technology transfer to individual smallholders, probably involving a more efficient coordination between agencies.
But there’s a larger-scale context to this problem that may affect us all. China’s grain production has risen fivefold since the 1950s, outstripping the pace of population growth. Despite this, the nation is no longer self-sufficient. The shift towards more meat production has placed a demand for soybean and cereal animal feed that can no longer be met internally. In 2012, China imported more than 60% of all the world’s soybeans that were available for export, and cereal imports are also on the up.
Reliance on imports to fill a shortfall in home produce is nothing new. But in China’s case, the additional risk that agriculture is increasingly unsustainable may amplify the demand. The potential scale of demand for imports is bound to have repercussions for global food production and food prices. Unless reforms are introduced quickly, the rest of the world may well find that they are sharing China’s trade-off with nature – through the weekly shopping bill.
THIS ARTICLE ORIGINALLY APPEARED IN ‘THE CONVERSATION’ ON FEBRUARY 26 2015. The Global Farmer thanks ‘The Conversation’ for making this article available.
Professor of Physical Geography at University of Southampton
John Dearing receives funding from NERC-ESRC-DfID Ecosystem Services for Poverty Alleviation Programme. He is a member of the The Green Party.
Why has this government inquiry never (as far as I know) been published and discussed as a matter of national importance? Because what it is really saying is the Australian processed food industry in Australia is buggered, it’s just a matter of time. If ever Australia becomes reliant on imported food then we shall have lost what control we still have over our resource rich country and we shall be at the beck and call of new masters. Continue reading “The Future of the Australian processed food sector”
Are we starting to see, ever so gently, the beginning of the food wars, which have been talked about in recent times and none of us believed in?
Are countries that cannot produce enough food for their own needs, starting to make sure they don’t go hungry in the future?
Can we in Australia fill the gap? We are always boasting about how many people we feed as well as ourselves. But our food imports are going up and our production per hectare with cereals is going down.
We are cutting back on Research and Development (R&D) and we are reducing the size of our Departments of Agriculture.
So the question remains can we and do we want to fill the world-wide demand for sheep?
The recent announcement by the Walsh brothers from Bunbury in Western Australia that they had done a deal for lamb and beef with a Chinese company worth a billion dollars over five years is some deal.
This is great deal for Western Australia and the rest of Australia. The Walsh’s’ say they have been working in China for many years and this deal is the culmination of all that work. I wonder if we are beginning to witness a land and a food ‘grab’ as part of a strategic plan for China’s future? Continue reading “Mary has a litle lamb – and all the world wants it.”
In the future is the market, the demand food in China, going to be a ‘Golden Fleece’ for Australian food producers? Are we capable of increasing our production to meet what we are told will be the ever-increasing markets for food in Asia?
More importantly those who should know, the ever-increasing number of ‘China experts’, claim that the growing middle class in China and other countries, like Indonesia, will be able to afford, pretty much at any price, what we produce and there are already several precedents that indicate that could be true. Milk as we shall see, Wagyu beef, premium wine and so on.
I don’t think Australia stands a chance when it comes to developing a bigger business in China or anywhere else. I think we will fiddle around the edges, make big of little things. The reasons for my pessimism are:
Productivity in Australia is going down. Costs are going up. We continue to fight among ourselves we refuse to become organised and speak with one voice.
Farmers are suspicious of everyone looking at agriculture with new eyes, especially if they are foreign and have money.
Farmers (generally) are heavily in debt so they believe, and they haven’t been told any different, that their potential to change and repay those debts in the short term so that change can happen, is limited. How to reduce crop and increase sheep for instance. Where will the money come from? Are the banks in favour of change? Will change affect the value of the land?
As the graphs below show we have a lot to do in the export arena just to catch up with where we were, once upon a time, and not just with China. We have also lost market share with Japan and Indonesia. Farmers need to know the reasons why. Those who process the food they produce for export are losing market share, market share in one of the fastest growing markets on earth. Why is that. Are we too expensive?
Given that progressive loss in other markets, what chance China?
There is a lot of ‘chatter’ mostly in the media and mostly from the uninformed like politicians that Australia has the agricultural productive capacity to become the ‘Food Bowl of Asia.’ Is it true?
There are those in the city who are plotting and have the money.
Is China Australia’s land of the Golden Fleece? Or is there a danger we could lose our money on the way to the goldfields? Fear not there is hope. Why? Well, for one thing there have been several very high profile meetings under the banner the ‘Global Food Forum’. Never heard of them? Not surprised, they were advertised in places where those on the land were unlikely to see the the advertisements.
When I saw the ‘Global Food Forum’ first advertised in The Australian and had a look at the list of speakers I thought they were notable in the world of finance and agribusiness if not agriculture, that is I couldn’t see many farmers on the list, but my interest was aroused non the less. I then enquired as to the price of a ticket and added on two nights accommodation in Sydney and the cost of plane ticket and the thousand kilometre round trip in the car to get to Perth, I decided the whole thing was out of my reach, way out.
Disappointed because I couldn’t afford to go, I gained some pleasure out of becoming cynical about the whole thing. Just another Pitt Street Cockie talkfest I reasoned, and those Pitt Street Cockies are so clever they know the answers before you ask the question and most of them don’t know where Western Australia is anyway!
I noticed the host of the event was a multi millionaire, one of the biggest carton manufacturers in the country, so he had a whopping vested interest. I deduced he would have said to himself, ‘more food, more cartons, only two manufacturers in Australia so it’s worth a punt.’ I looked up the definition of the word ‘altruism’. Never met the man so I don’t know if it applies.
Will these men save or ruin Australian agriculture. We need to hear what they have to say.
There is now no doubt, there is unquestionable evidence that the Premier of Western Australia, The Hon Colin Barnett, MEc. MLA. Minister for State Development; Science and the Hon Ken C. Baston, Minister for Food; Fisheries, are intent upon doing everything they can to secure more Chinese investment into West Australian agriculture. How they are going to do it?
They are going to hold an investment conference especially for the Chinese. Mr Barnett and Mr Baston are certainly not standing still:
Western Australia – China Agribusiness Cooperation Conference.
State Reception Centre, Kings Park, Perth
9 -11 April 2014
Premier Colin Barnett is a passionate West Australian. There is also no doubt that Mr Barnett has determinedly used his Office, and the influence that goes with that Office, to secure major commitments from the Chinese to invest in West Australian industry, mainly into mining, but there have also been substantial Chinese investments in agriculture.
Mr Barnett has led delegations of business people from Western Australia to China to further cement relationships and to forge new ones.
I don’t think it would be unfair to call Colin Barnett a Chinaphile.
There has always been a belief among the majority of West Australians that ‘Chinese’ investment in Western Australia in the past has been conditional upon the imprimatur, and investment of the Central Government of the People’s Republic of China.
In other words the Government of China is always involved somewhere in the deal as an equity partner. Mr Barnett must be aware of this and be unconcerned that a sovereign state is investing in and becoming an owner of, Australian freehold property.
As far as I am aware it has never been denied that the Chinese government will be a equity partner in any investment in Australia.
Recently Mr Barnett was critical of Australia’s foreign investment rules, claiming they were sending the wrong message to China. Mr Barnett said that the United States could invest more than $1 billion in Australia without being subject to Foreign Investment Review Board Rules, but it was different for China’s state owned enterprises where any level of investment from $1 up was subject to review.
Mr Barnett believed this caused resentment in China.
In July 2013 speaking from Zhejiang province in China Mt Barnett said he believed the Chinese were not seeking to own Australian land – they just wanted to protect their investment for food and have a secure relationship with Australia.
Yet the previous month, June 2013, the Queensland Country Life reported that Chinese investors had spent $757 million in the first quarter of 2013 buying land in Australia, with WA, according to Landmark – Harcourts, topping the charts with sales of $350 million. True or false? We may never know.
There is every chance we will run out of farmers before we know whether we can feed the people of the world.
It’s a frightening proposition but just look at the evidence.
In 1968, Paul Ehrlich in his book ‘Population Bomb’ made the prediction the world faced massive starvation due to overpopulation. He wrote:
The battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate.
Then along came Dr Norman Borlaug, ‘the father of the Green Revolution’, and his team of plant breeders and the world was saved from starvation. In 1970, Borlaug became a Nobel Laureate.
Between 1950 and 2004 world wheat yields rose from an average of 750kg/ha to 2750kg/ha (FAO), due to the worldwide adoption of high yielding, high input short straw wheat varieties, developed by Borlaug and his teams. Similar improvements were achieved in the yields of maize and rice.
This revolution in plant breeding, combined with new chemicals to control pests and diseases averted the global starvation tragedy predicted by Ehrlich.
In the last forty years the population of the world has doubled and, by and large they have all been fed.
The millions, who have died of starvation over that period, didn’t die because there wasn’t any food for them; they died because we spent our money fighting wars rather than getting food to those who needed it. Continue reading “No more farmers?”