Eying to tap investments from emerging economic powers like India and China, Australian Trade Minister Craig Emerson has pitched for opening up of the agriculture sector here.
The minister said that just as foreign investment by Asian nations seeking energy security had bankrolled the development of the booming resources industry in previous decades, the demand for food security could unleash a new wave of investment in Australian agriculture, The Australian daily said.
Mr. Emerson said he was not proposing “selling off the farm”. Instead, the government was considering ways to encourage foreign equity investment in Australian food-producing companies, which he said would make it easier for them to raise the finance necessary to expand and meet the new market demand.
Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has said there was potential for Australia to lift the value of its agricultural exports by 140 per cent by 2050 in real terms.
ABARES report, released in January, further noted that emerging middle classes in Asia, Eastern Europe and Latin America created increased demand for beef, wheat, milk and sheep meat.
It also supported the foreign investment as the best means to fund the expansion.
Emerson said drought-prone Australia needed major investment to improve water infrastructure and create enough equity for pastoral and agricultural companies to be able to access bank finance.
“Anxious about food security, China, India and several Middle Eastern countries have increasingly large investable surpluses that they are looking to deploy in the global food production task,” he said.
“There are powerful market forces at play here. This could be the catalyst for bringing Australian agriculture into the new economy,” he said as he mentioned that his new portfolio Responsibility of Competitiveness would focus on assisting the Prime Minister Julia Gillard position the nation to milk the rise of the Asian middle class for business opportunities for Australia.
With the government working on a white paper on the issue, Mr.Emerson said animal protein sourced from beef, sheep, chickens, pigs and fish would displace grains as a food source for the burgeoning middle-class populations.
“Just as Australia has established itself as a reliable supplier in meeting Asia’s minerals and energy security needs over the last quarter of a century, it can establish itself as a reliable supplier in meeting Asia’s food security needs over the next quarter of a century,” he said.
“Attaining food security...will require deeper integration of the Australian economy with the economies of Asia through foreign investment in agricultural production and logistics in Australia and technical co-operation by Australian governments and businesses in food production in Asia,” the Minister said.
