Australia’s competitiveness in contributing to global food security

Abstract

How much Australia can contribute to food security in the rest of the world depends on the extent to which it is a net exporter of food. That in turn depends mainly on the profitability of farming relative to mining and other productive activities within Australia. Farming has to compete with other domestic sectors for mobile resources such as labour and capital, and with other suppliers to foreign food markets in Asia and elsewhere. So even though Asian markets have expanded and moved from staples to higher-valued foods as local per capita incomes have risen, there is no guarantee Australia’s sales in and share of those and other growing markets will rise. Perhaps the four most important influences on growth in net exports of farm products from Australia are developments in their international prices, in real exchange rates, in agricultural support policies abroad, and in domestic farm productivity. This paper begins by briefly evaluating Australia’s historical record as an agricultural exporter. It then summarises recent projections of that capability and Asia’s likely food import needs through to 2030. Past policy experiences are then drawn on to evaluate various prospective interventions that Asian governments might use to address their food security concerns. Estimates of the potential effects of some of those are presented before the final section examines ways Australia could increase its competitiveness as net exporter of farm products.