Agribusiness & Asia

With the world’s population projected to grow from 7 to 8 billion by 2025, the power balance – in sheer population numbers and in wealth – will shift from west to east.

A staggering 85% of population growth in that time is projected to take place in Asia and it will spark the biggest growth in the middle class in history. It’s something agribusinesses in Australia need to be keenly aware of because a rising middle class means a rising demand on quality food products.

Australia - Asia Agriculture Investment partnerships should be encouraged to secure food security within the region. In particular investment partnerships with China and India , Including investment into research and development projects , using cutting edge technology to produce more sustainable environmentally productive agriculture. Better use of water recourses in agriculture and reducing world agriculture/livestock systems consumption rates that is more sustainable long term. Investment into R&D around agro-science and soil science. IT Agro-Technologies and Agro development technologies into more nimble efficient farm machinery. Precision Agriculture technologies go hand in hand , there are many opportunities in the Asia Pacific Region to partner using these technologies. 

More efficient use of irrigation from 75% down to 37%. Agriculture food systems faces many challenges in the coming years to feed the world. Not one country can do this alone without investment partnerships. We should also be producing food crops of worth, rather than cultivating crops that have no food or fibre value, which takes up valuable land, wasting and using productive land, and valuable water recourses, which are used for dodgy tax investment schemes, and again have absolutely no intrinsic food or fiber value.

The Asia Pacific Region has the capacity , climate , soil types , water , including aquiculture fishery production systems, to provide many successful partnerships agribusiness venture outcomes. Aquaculture emerged as a significant source of fish and other aquatic animals in the mid-1980s, and it now provides at least half of the food fish consumed in the region. Given the fact that fish is healthier than many meats, further rapid growth of aquaculture presents significant opportunities for improving food and nutrition security for the poor, provided it is undertaken sustainably. There are growing concerns about the intensification of aquaculture, however, in terms of both its sustainability and its environmental impact and these must be addressed before intensification.

Livestock production has been growing rapidly over the past 20 years, and FAO projects that global demand for animal source food (ASF) will increase by a further 76 percent from 2005/07 to 2050. But rapid growth of the livestock sector has led to many problems, including increased risks to human health from pathogens harboured by animals; environmental degradation, pollution and influx of high levels of drug residues into the environment; emergence of antibiotic-resistant strains of bacteria because of the indiscriminate use of antibiotics; loss of biodiversity and genetic resources; and acceleration of climate change through livestock-associated emission of greenhouse gases. However in recent times , ethical livestock production is becoming more sophisticated , more efficient and returning back to a more holistic approach. Bearing this in mind , I do not believe large scale highly intensive animal production in the Asia Pacific region is the answer, rather a more productive sustainable long term view of agricultural production centred around empowering family farming is essential. For the sustainability of agricultural, forestry and fishery production systems. Such farms are the dominant mode of farm organisation around the world, especially in Asia and the Pacific. If animal production systems are to be implemented , that should be kept to small animal production such as chicken, pork and other small animals. Protein crops such as legumes / beans and improving rice varieties is also an option.  I would suggest there are many opportunities for the intelligently minded investors to create investment partnerships into long term sustainable Agricultural , Aquiculture , Forestry and Livestock systems in the Asia Pacific Region. Improving food production systems and creating investment partnerships within the Asia Pacific Region , not only empowers people but also lifts people out of poverty , increases health creating opportunities for the people of that country.

 In light of this importance, the General Assembly of the United Nations, at its 66th session, declared 2014 as the International Year of Family Farming (IYFF) and invited FAO to facilitate its implementation in cooperation with governments, the United Nations system and relevant non-governmental organizations.

The overall objective of the IYFF is to promote and help guide a broad discussion at national, regional and global levels to increase awareness and understanding about the diverse contributions, challenges and support needed for family farms and smallholder farming in eradicating hunger and reducing rural poverty, leading to sustainable development of rural areas and sustainable production aimed at achieving food security.

FAO organized a regional multi-stakeholder dialogue in November 2013 to kick-start a regional initiative to support the IYFF. A regional conference on Family Farming in the 21st Century: Challenges and Opportunities is being organized in Chennai, India in August.   

Mark Withnell - AgrilinX International

So what are the key facts agribusiness owners need to get their heads around?

Asian Power Shift  By 2030, a staggering 66% of the world’s middle class will live in the Asia Pacific region, according to the Washington think tank, the Brookings Institution. That’s up from roughly 30% now.

By that time, North America now and Europe’s combined middle class will have shrunk from around 54% to just 21%. The number of people in the middle class doesn’t always exactly represent the spending power of the group. If you dig into that more closely, the shift from west to east is even more mind-boggling.

Currently the US and Europe account for 64% of middle class consumption. By 2030 that will be down to 30%. The middle class in the Asia Pacific however, will grow from 23% of middle class consumption now to 59% by 2030. The changing world dynamics have significant implications for Australian agricultural industries, helped in no small part by their proximity to these markets.

Check out these 10 statistics that Australian agribusinesses can’t afford to ignore.

(Note that the first 7 are from the Department of Agriculture, others as marked)

1) The value of food consumption was projected to be 75% higher in 2050 than 2007, an average annual increase of 1.3%.

2) Demand for food is projected to increase most strongly in Asia, doubling between 2007 and 2050.

3) China will drive the growth in demand for food, accounting for 43% of the total increased demand for beef, wheat, dairy products, sheep meet and sugar by 2050.

4) India will account for 13% of food growth, with a strong increase in demand for dairy products. India will parallel China in the coming decade. 

5) Rising incomes have already begun to change the diet of Asian residents, with an increase in demand for meat and other protein, as opposed to traditional staple grains.

6) By 2050, the most sought after food products are expected to be beef, wheat, dairy, sheep meet , rice and sugar. And of course of other Agricultural and Livestock commodities as the regions consumption grows.  Most of that recourse will be consumed by Asia. 

7) Growth in demand for these commodities was projected to increase the value of Australia’s agrifood exports by 142% between 2007 and 2050. That now has to be revaluated as the regions demand for agrifood is growing faster than production and technology.   

8) The global wheat trade is estimated to double – to 240 million tons – by 2050.

9) In Southeast Asia, per capita consumption of meat is expected to increase by 60%, from 38 kilograms per year in 1990, to 60 kilograms a year in 2030. However trying to keep that consumption rate down to 60 kilograms or less will be the challenge. Anything above 60 kilograms presents environmental and recourse issues.     

10) By 2030, China and the rest of developed Asia will consume just under 60% of the world’s grain and 42% of agriculture and food imports. With India following behind China in the next decade. This is an area where I believe opportunities abound , in establishing agricultural agribusiness enterprises in climatic zones and regions within the Asia Pacific Region.

Food security, the production of food and how we produce food is going to be a challenge. However I believe fostering investment partnerships with China , India and the Asia Pacific Region , will prove to be not only a positive alliance but also a secure long term investment portfolio to the smart operators who realise Agriculture and Food Security will be a very lucrative sound prudent investment strategy, into Australian, New Zealand and Asia Pacific Agriculture. Food security and Agricultural Production Systems will be bigger than the mining recourse sector. No other country in the Asia Pacific Region is better placed to secure these future investments, than Australia. Yes there are challenges , however Australia is world best at agricultural innovation and developing Ag technology to create sustainable viable agricultural systems , while at the same time looking at prudent solutions and outcomes to protect the environment for long term Agricultural prosperity. Australia already has the runs on the board as the safest and most ethical food production systems in the world and will continue to lead the way long into the future. Developing and fostering successful agribusiness partnerships within the Asia Pacific Region to create long term food security.   

AgrilinX International Pty Ltd