Don’t come the raw prawn

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The federal government recently announced an extra $137.8 million for further, new biosecurity investment over five years.

Good news, for sure, but is it too little too late?

The edge was certainly taken off the announcement by allegations aired by ABC Four Corners on Monday. This revealed a highly destructive virus has again been detected in supermarket prawns, despite tightened import restrictions introduced after a disease outbreak decimated south-east Queensland’s prawn farming industry in 2016.

The original incursion came as no surprise to those involved in the industry. Inadequate import requirements and haphazard defences at the border had long been a sore point.

While consignments were meant to be subject to virus testing in order to pass quarantine inspection, it was clear there were holes in the regime. Marinated or battered raw prawns weren’t required to be tested. Inspectors were overworked and ill-prepared – they didn’t even have warm clothing to operate in a minus 30-degree freezers peeling open prawn cartons. Importers were permitted to unload their containers unsupervised, which gave them ample time in which to fiddle with the stock before an inspector showed up.

A 2009 expert risk assessment found that, without proper safeguards, there was a high likelihood that diseases carried by imported raw prawns could spread to Australian prawn populations.

Then the inevitable happened.

In November 2016, white spot disease was detected in farmed prawns in south-east Queensland farms. Investigators believe it was most likely the disease was introduced into local rivers through infected imported bait from a local supermarket, where prawns are cheaper than in tackle shops.

Subsequent tests found more than 85 per cent of imported samples from retail outlets also tested positive for the disease.

Prawns worth tens of millions of dollars, which were being raised in ponds at five infected farms, were destroyed when the outbreak was confirmed.

Barnaby Joyce, the then agriculture minister, announced the indefinite suspension of green prawn imports into Australia. “Australia’s $358 million prawn industry must be protected and not put at risk by the careless and selfish acts of a few,” he said.

A ban was also imposed on imported uncooked prawns being used for bait, and samples from all consignments of imported green prawns were required to be sent for testing to ensure they were free from white spot.

In a damning review at the time, the Inspector-General of Biosecurity found the devastating outbreak of white spot represented “a major failure of Australia’s biosecurity system”.

“The department demonstrated a remarkable level of naivety about the potential for importers to willfully circumvent import conditions for any class of prawns that required viral testing,” the report said.

By the end of the year, the government had initiated action against nine seafood companies responsible for 70 per cent of all raw prawns imported into Australia in 2016. Only one has so far been charged, with the case against it not listed to be heard until 2019.

The ban was lifted in mid-2017, though import conditions were tightened.

But it was not enough.

In April this year, inspectors once again identified the virus in the wild in Queensland. In May, twelve consignments of imported prawns inspected under the new “enhanced” regime tested positive for the disease. Then testing conducted for the Four Corners report found traces of the virus present in 30 per cent of prawn samples purchased from a number of Queensland retail outlets.

However, almost two years after the original outbreak, white spot testing on marinaded, battered, or crumbed raw prawns is not scheduled to begin until September this year.

In the face of rapidly increasing international trade, scientists, industry executives, and former government officials have repeatedly said that Australia’s biosecurity defences are simply inadequate.

These revelations raise serious questions about Australia’s preparedness to combat a range of exotic diseases and pests that have the potential to wreak carnage on the economy.

As an island nation, we have earned an international reputation for high quality, safe produce. This is our key point of difference from our competitors who are plagued with poor regulations and major pests and diseases. If we are to maximise the benefits presented by emerging Asian markets, we need to maintain that safe, clean and green image.

As an island off a bigger island, Tasmania relies heavily on this reputation, and so we have even more at risk.

Any failure of our biosecurity defences potentially poses an enormous threat to our national security – and that means investment in these systems must prioritised by all governments.

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Sunlight is the best disinfectant

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After a slow start, and more than 280 submissions in regards to rural lending, the Financial Services Royal Commission agreed last month there would be value in focussing specific attention to the interactions between farmers and banks.

Over the course of a week, the Commission heard about a very fraught relationship between farmers and financiers. Evidence was given of loan terms being changed without notice or consultation, over-stated property values, and unethical and heartless treatment of farmers once loans had been revoked.

Tasmanian cattle farmers Michael and Dimity Hirst were the first to give evidence.  They were forced into default when the bank cut valuations on their property by forty per cent in 2011 without warning.  In front of the Commission, five years later, an executive of the bank finally offered an apology for selling off their farm and forcing them into bankruptcy.

The Commission heard that banks pushed interest rates on loans up to extraordinarily high levels if a farmer was deemed in default to use as leverage. In some of the cases heard by the Commission, this was as high as 16 per cent. When Commissioner Kenneth Hayne intervened to ask what the leverage was for, he was advised this was to achieve a reduction in debt or sell a property. Sales of rural banking loan books also resulted in farmers being placed in default by the new lenders who didn’t understand their businesses.

The audience broke out in applause when Chris Wheatcroft from Rural Financial Counselling Service of Western Australia, spoke about the impact of ‘sending in the receivers’.

“There is nowhere to go once the receivers [are called] in. And in terms of value, farmers will see that hard-earned money, farm and asset disappear under a receiver like you’ve never seen,” he said.

“They would perceive the money is absolutely wasted and it would be hard … to say that’s not correct. There’s a massive destruction of value. And that sits deeply with people.”

Yet evidence presented to the Commission revealed forcing farmers from their properties is a no-win proposition – something that is not news to people in the industry.

Properties often take years to sell, especially during drought, and forced sales drive overall values down throughout the district. This then has a knock-on effect, as low prices on forced sales push other farmers into technical default because of low loan to valuation ratios.

Forcing farmers off their land and from their family homes actually reduces asset values. Farms left vacant and unmanaged rapidly depreciate. Infrastructure is not maintained, and incursions of weeds and feral animals contaminate productive lands. This too has spill-over effects onto neighbouring properties, and contributes to depressed community conditions.

It’s clear that, despite their crucial role, many banks still don’t really get the vagaries of farming. They don’t understand how different farm lending is – or should be – to commercial and housing lending. Not only do the central administrators in banks lack the information and expertise to question these assessments, their business models have encouraged overvaluation and over-borrowing as a means to grow their businesses. Worse still, they don’t seem to appreciate the broader social and economic dimensions of the role they have in managing farm risks.

Many of the problems in the evidence given to the Commission have resulted from a lack of communication between banks and farmers – and there is a clear pathway to resolve this situation.

One of the key recommendations of the 2017 Senate inquiry into primary production financial lending was for the establishment of a national farm debt meditation scheme that would see the speedy resolution of farm finance issues. There has also been some discussion in the Commission of the need to implement a nationwide approach to farmers in distress.

Such a scheme would make it compulsory for banks and other creditors to offer mediation to farmers before commencing debt recovery proceedings on farm mortgages.

The Royal Commission has brought into the open what many of us in the industry have long known. The pressure of not performing is high, and there is clear evidence that mental health issues are a big issue for farmers who are trying to desperately hang on in difficult circumstances.

There’s a saying that sunlight is the best disinfectant – and exposure of the unethical behaviour of some financial institutions will no doubt lead to more transparency. Implementation of this recommendation would go a long way to ensure that there is no repeat of the unfortunate behaviours that have now come to light.

 

 

 

 

 

Consumers really do want it all

consumers want it all

Healthy lifestyles, “clean” ingredients, at-home gourmands, value consciousness and e-commerce speciality products are the key food and drink trends for future, according to a report from US market research organisation Mintel.

While the research is based on the American market; many of the findings have been mirrored here in Australia.

Consumers are shunning restrictive fads in favour of a more “holistic wellness” approach. These more open-minded, health-conscious consumers are keeping an eye on the long-term, which makes them less fearful of the occasional splurge.

The battle with expanding waistlines is set to continue, with diet and wellness listed first on the menu. High-protein diets are the favourite in the US. Forty per cent of US consumers agreed that food and drink products high in protein help users feel fuller longer, and 37 per cent agreed that protein assists with building muscle. In addition, the number of food and drink products launched with low/no/reduced fat, low/no/reduced sugar or low/no/reduced calorie claims fell in the past year, while the number of products with a high/added fibre claim or a high protein claim have risen.

Rather than the relatively intangible claim of being ‘good for the environment,’ the new priority is transparency. This trend is creating a new flock of consumers who want to know more about ingredients, products and the companies that make and sell them.

Consumers are keen to see more nutrients on the plate, but also said they were concerned with the ingredients in each mouthful. Twenty-two per cent of US grocery consumers would like to see improved labelling on packaging to help them easily identify healthier food products, and less than 38 per cent trust what companies say on labels. Currently, 80 per cent of US consumers look for nutritional claims when buying food, while over one third look for products that are all natural.

Food origin is also quickly becoming an important purchase factor, with 35 per cent of consumers seeking out products that are locally produced. Additionally, ‘clean’, ‘simple and ‘real’ are all being used on labels to introduce natural, no additives or preservatives.

Consumers want to cook like celebrity chefs but, for the most part, they still don’t know how to. These trends indicate that for many cooking has evolved beyond a chore, creating a market for products that cater to aspiring chefs by making quality home cooking easy. The research found that 26 per cent of US consumers claimed to have advanced cooking skills, up from 20 per cent in 2012; and forty-one per cent considered themselves to have intermediate skills.

Not surprisingly, the increased popularity of home cooking has led to more consumers owning small kitchen appliances. A slow cooker or crock-pot will be found in 79 per cent of US kitchens, 76 per cent owned a hand mixer, and 49 per cent owned a stand mixer or Bamix-type tool.

Meal kits, ingredient delivery services and other products that encourage home chefs to make recipes their own have a growing audience. Successful brands will provide online and mobile support to budding home cooks.

Financial pressures mean many consumers are constantly redefining their definition of ‘value’. The only certainty is that ‘value’ is not always just about lowest price. Instead, it could mean private label in some scenarios, and premium brands on other occasions or for other types of food.

The research concluded that value will continue to drive consumer choice, as the influence of private label products becomes more noticeable and shoppers become less brand-loyal. Last year, more than 30 per cent of US food and drink launches were private label.

E-commerce is also shaking up food and drink retailing. The internet provides access to products from a range of companies that are designed to address specific dietary needs, personal interests and other distinct consumer needs.

The research said that, although convenience still plays a major role in many consumer’s lives, it has become more important for them to maintain control over the food and drink products they consume. An understanding of the source and story of their food and drink gives consumers the “comfort to make something all their own”.

The quest for value and products that fit their personal needs drives consumers to hunt store shelves and online selections in search of exactly what they want.

Healthy or not, low-cost or not, adaptable or not: consumers actually do want it all, it seems.

 

New ideas underpin Tassie farmer confidence

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Australia has a long history in agriculture and many new niche industries have emerged into multi-million dollar industries over the last 10 years (eg avocados, almonds, chia).

With global market trends impacting food consumption, research commissioned by AgriFutures Australia has now confirmed that Australian rural industries have clear opportunities to identify new food types and to connect with, and drive, new and expanding markets.

In undertaking this research, Coriolis Agriculture scanned global food industries to identify new opportunities in emerging agricultural industries.

The research specifically targeted Australian industries with a gross value of production between $1-$10 million per annum. A multi-stage screening process was used to identify, analyse and rank the attractiveness of agricultural industries. The research combined trade data and a range of qualitative and quantitative criteria.

Fifty-three industries emerged at the intersection of “having global demand” and “having commercial presence in Australia.” Further analysis and rankings identifies twenty-six high potential emerging industries with the potential to grow to $10 million or more in the next five years.

A combination of factors underpinned these projections. These include: premium products (eg marron, camel milk); on-trend (eg hemp seed, seaweed); new or emerging cuisine (eg jackfruit, sheep milk); and health benefits and attributes (eg chia, flaxseed).

This research not only identifies and analyses the opportunities with the highest potential for success but provides a vast resource and analysis of existing agricultural products and industries.

The identified opportunities range across the agricultural sector, including marron crayfish, sheep milk, chestnuts, hazelnuts, jackfruit, pomegranate, flaxseed/linseed, hemp seed, eucalyptus oil, deer, silver perch, seaweed, redclaw crayfish, buffalo milk, camel milk, chillies, taro, cassava, prunes, rambutan, pitaya (dragon fruit), black tea, chia, amaranth, mustard seed, & lavender oil.

AgriFutures Australia was formerly known as the Rural Industries Research and Development Corporation. Managing Director, John Harvey, said the scan confirmed Australia’s emerging industries are ripe for the picking and will deliver big value to the sector.

“AgriFutures Australia has set an ambitious goal of supporting the emergence of five agricultural industries with a collective turnover of at least $50 million in the next five years. With focused management and investment, these industries are tipped to be the next big thing. The industries could make a significant contribution to the future prosperity and profitability of Australian agriculture, we will use this report to identify opportunities to invest in RD&E, focusing on real commercial outcomes.”

Emerging animal and plant industries play an important part in the Australian agricultural landscape; they contribute to the national economy, provide alternative enterprises for rural and regional communities and some will be tomorrow’s major industries.

This can be seen playing out in day-to-day farming businesses in Tasmania.

Many of these new crops or products are already being grown in here – and there is certainly potential to scale up in some cases or for start-ups in others.

You may have noticed these changes on the ground.

There are more cows in the paddocks than ever before, and there are more paddocks carrying cows than ever before. Pivot irrigators, once a rarity, are commonplace and getting longer; there are crops growing where they haven’t been seen before. Our dairy products are the benchmark for quality; we now produce some of Australia’s best wines; and our whiskies, gins, and ciders are rapidly gaining world recognition.

Tasmanian farmers have set themselves a target of increasing their productive value five-fold by the year 2050. Many farmers are adopting exciting new approaches to their businesses, including a range new crops and products, and of high-tech approaches to agriculture. These advancements have been grounded in the step-ups that the rollout of new irrigation schemes has given across the state.

And that puts our farmers in a very good position compared with our mainland peers.

According to the latest Rabobank Rural Confidence Survey, heightened concerns over the dry weather gripping much of rural Australia have driven down confidence among the nation’s farmers to a five-year low.  Seasonal conditions were cited as the key concern by 75% of farmers surveyed who had a negative outlook on the coming 12 months – up from 36 per cent in March 2018.

In contrast, with comparatively favourable seasonal conditions and strong price prospects, particularly for dairy, confidence hit an 18-month high in Tasmania.

It is clear that new ideas are catching on a little more quickly in Tasmanian farming than elsewhere and, once again, we’re ahead of the game.

Shoppers not ‘walking the talk’

Image result for image trendy food shopper

Every day, we hear more about the need for our food to be sustainable, green, local, and ethical.

When a farming system or a food product is described as ethical, my hackles always go up. Who decides what’s ethical and what’s not? And why are some people’s ethics perceived to be superior to others?

I don’t think I’ve ever met anyone who knowingly advocates activities that are harmful to the environment or animals. Certainly, most of the farmers I know are passionately committed to caring for their land and their livestock; and to ensuring they leave their farm in a better state than it was when they moved in.

But I digress. Today I want to look at the phenomenon of so-called ‘ethical’ food purchasing trends.

David Hughes is Emeritus Professor of Food Marketing at Imperial College London. He has an unparalleled knowledge of global food issues and opportunities, and is a regular visitor to Australia. One of his research themes is consumer attitudes to ‘ethical’ food.

For the purposes of his research, ‘ethical’ is defined as a broadly ‘green’ bundle of products marketed as organic, Fairtrade, Rainforest Alliance, vegetarian meat alternatives, animal welfare-friendly, etc.  Importantly, Hughes makes it clear that this doesn’t mean that conventional food is non-ethical – rather, that this is a set of market identifiers.

His findings indicate that, from pretty much a standing start fifteen years ago, consumers in developed countries worldwide are increasingly demanding that much more is included in the food they buy than they did in the past.

In the UK, consumer expenditure on ethical food and drink products increased ten-fold over the last fifteen years.  It is estimated that this sector now comprises around eight per cent of total food and drink purchases.

Here in Australia, fifty-five per cent of people say that they think buying locally sourced food is very important to them, up ten per cent over the past decade; and eighty-five per cent of people say that they prefer fresh food to be sourced locally or, at least, nationally.

Hughes says that this means there is a clear message to retailers here: shopper loyalty will be higher for stores that support local farmers and businesses, support the local economy and minimise environmental impacts.

So, green is the way to go.

But, hang about – this is only part of the story.

Hughes goes on to say that UK consumer surveys on food purchase patterns show that price and the attractiveness of promotions are far and away the two most important things influencing purchase behaviour, followed by quality and taste, and healthiness. Ethical and eco-friendly factors only rate at tenth place.

Australian studies show a similar situation. Research here indicates that shopper loyalty is higher for stores that support local farmers and businesses, support the local economy and minimise environmental impacts; but surveys show price and promotions, then quality, taste and healthiness, affect buying behaviour the most.

These apparently conflicting research results go to prove something we all know: people don’t always do what they say they will do.

Consumers say they want to support local producers, and they say they buy Australian because that’s what they are expected to say. Yet, actual purchasing data clearly shows they are not walking their talk.

The take-out message from these research findings is that consumers are increasingly demanding more of those who produce their food. Whether it be local, animal welfare-friendly, environmentally sustainable, chemical-free or whatever, the green bar is rising inexorably. However, at the same time, those same consumers have also made it clear that they won’t pay a premium for more ‘ethical’ food. Instead, they will simply discount products that fail to meet their ever-rising expectations about the food they feed their families.

This situation resonates strongly with Tasmanian farmers, who are constantly being told by people with no skin in the game that their future lies in producing high-value niche products on the assumption that returns will be higher. Whilst there are clearly opportunities in this direction, it is not a one-size-fits-all solution.

Farmers everywhere today are facing continual downward pressure on returns at farm gate and rapid upward pressure on input costs. At the same time, as we’ve seen here, consumer expectations are constantly escalating.

You don’t have to be Einstein to see the approaching iceberg.

Professor Julian Cribb, the well-known Australian science commentator, was spot on the money when he said that we all need to “value our food a little more, demand it be produced by less toxic and more natural systems, and be willing to reward local farmers much better for growing it sustainably, with care, skill and wisdom”.

 

 

Feeding the hungry

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Experts agree that by the year 2050 there will be about nine billion people in the world. Scientists are seriously discussing the question of whether we will have enough food to support all these mouths.

The world hit peak production of wheat in 2004, peak eggs in 1993 and peak dairy in 1989 which has led some experts to the worrisome conclusion that we could be running out of food.

A study in Ecology and Society looked at how the production of 27 renewable and non-renewable resources changed in the past half-century. Over a dozen of the resources were food-related, and all of those – with the exception of farmed fish – have already peaked. “Peak” here means when yield gains stop accelerating. The world production of say, soybeans, may continue to grow, but the rate of growth has slowed.

What these numbers mean is that we have exhausted all of the easy solutions for growing more food in the world. We have farmed the fertile lands; we have created powerful fertilisers and pesticides; we have made genetically-modified crops. What’s next?

“[C]onstraints on production may not be alleviated unless there is disruptive innovation,” they write. That “disruptive innovation” would most likely be in the form of new crops. Scientists are already trying to domesticate new crops like the potato bean and Kernza (wheat grass) that can thrive in our hotter and drier future world.

However, many scientists believe that the genetic gain that has been achieved for major crops is half due to improved breeding methods and half due to improved agronomic practices. In the developing world, it is clear there are still huge gains that can be achieved through agronomy, the science of crop production.

Seventy per cent of the hungry live in rural areas and rely primarily on agriculture for their livelihoods. The United Nations argues that the best investments in agriculture are in these small-scale farming areas, where the “yield gaps” are the largest and where hunger in the most prevalent.

Ultimately, then, farmers in less developed economies not only need to generate enough to feed their family, but also to earn a bit more, so they can actually rise above mere subsistence. That gives them some money that they can spend on their children’s education or various other things – which is where we see vast improvements in development.

There is clear data available to show that the hungry are not hungry because the world lacks food. Research indicates that we grow enough food right now to feed about 10 billion people.

Yet around 1 billion of today’s 7.6 billion people are chronically undernourished. Furthermore, well over 1 billion suffer from significant malnutrition – in a world of plenty.

They are hungry because they are poor, and they are poor because they are (by and large) either small-scale farmers without enough land, credit, extension services or investment; or they are underemployed workers with incomes too low to support their families.

Increasing the global supply of agricultural commodities might bring food prices down for a while, but it won’t feed the hungry.

If we’re going to achieve the goal of zero hunger, we have to change course in developed economies, too.

We need to stop diverting so much of our food and feed to biofuel production. According to the International Energy Agency, demand for crop-based biofuels will grow 150% by 2035 if policies in developed countries continue as they are now. Scaling back government consumption mandates, such as the US Renewable Fuel Standard alone would do far more to keep food prices in check than investing in expanded agricultural commodity production.

With reliable estimates showing we squander one-third of all food grown in the world today, we must also work to reduce food waste and spoilage.

In countries like Australia, most of that waste is at the retail and consumer levels. In developing countries, it comes from poor storage, transportation and infrastructure – the very things that should be the focus of public investment.

There are clear solutions if we increase the availability of land and food by reducing biofuel production, get more of the food we grow to the dinner table by reducing food waste, and invest more in the world’s small-scale and family farmers.

It is time to stop fear-mongering about the future. We can feed the world’s growing population if we first focus on fixing the problems in the present.

Much more than cows and ploughs

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Everyone knows that agribusiness isn’t just about cows and ploughs these days. Yet there is a tendency to look at the industry through the very narrow prism of production agriculture.  There is much more to the sector now than what happens on-farm – and this growing need brings huge opportunities.

But, before we go there, let’s have a quick look in the rear vision mirror.

A few years back, much was being written about the decline of the agribusiness sector, with pundits often referring to farming as a ‘sunset’ industry.

Move forward a few years, and the story was changing.  We started to hear about shortages of suitable people to fill vacancies across the industry – from entry level to post graduate.  This was attributed in part to the perceptions that career paths were not attractive, and that there were limited employment opportunities in a stagnant or declining industry.

In other words, ‘experts’ saying the industry was on its way out were convincing people who may have otherwise been interested in working in the sector to look elsewhere. This meant vacancies were going unfilled, fuelling the perception of a ‘sunset’ industry – a self-reinforcing fallacy.

Yet the increasingly complex and competitive nature of agriculture is driving agribusinesses to adopt a tougher approach to farming, learning how to work smarter not harder. And that means demand for talented and qualified applicants is outpacing supply at an increasing rate.

In 2010, a study of job advertisements in the agribusiness sector indicated that there were at least six jobs for every graduate; and that the shortfall in the availability was a threat to the sustainability of agricultural and horticultural industries in Australia. Many employers were seeking graduates, and there was a significant shift in workplace attractiveness, including salaries, in order to encourage potential employees into the sector.

New research from the National Centre for Vocational Education Research shows that future farmers and agriculture industry workers are in for a jobs bonanza in the next six years.

Researchers from Monash and Victoria Universities used modelling developed over three decades to provide forecasts of demand in the Australian labour market for the period 2017 to 2024.

The modelling predicts an extra 1.9 million people will be employed by 2024, at an average growth of 1.8 per cent per year, compared to 1.4 per cent between 2011-2016. But the growth in our standard of living – gross domestic product per capita – is expected to halve, from 1.8 per cent this year to 0.8 per cent by 2021, due to stagnant wage growth and an ageing workforce. In 2024, 35 per cent of the working-age population will be 55 years or older, up from 33 per cent today. The unemployment rate, currently holding steady at around 5.5 per cent, is expected to hover around the same mark until the mid-2020s.

People may want to reconsider a future in retail, mining or the public service. Weak wage growth will stunt spending in shops, the final chapter of the mining boom will limit resources opportunities, and the constraints of returning budgets to surplus will halt employment growth in the public sector.

But bad news for some will be good news for others.

Farmers, nurses and teachers are in for a jobs bonanza in the next six years, as millions of baby-boomers retire to make way for a new generation of workers in these rapidly expanding industries. Free trade agreements, an ageing population, and an influx of new young migrants are expected to provide for extraordinary opportunities in the three sectors.

More than 122,000 employees will need to be found to make up for the expected growth in the wider agribusiness sector. Demand for farmers and farm managers is expected to increase by more than 10,000 each year. Replacement demand will be the source of 53.8 per cent and 63.3 per cent respectively, meaning that there will be solid real growth over the period.

With a growing focus on food security, more people want to understand the value chain in agriculture – which means it’s not just about farmers. We need scientists to uncover the next innovation, veterinarians to protect animal health, engineers to develop the newest equipment, marketers to promote new concepts, and accountants and statisticians to turn growing volumes of production data into knowledge and decisions.

Everyone wants more meaning in their lives than just a job and a pay cheque. Younger people, in particular, are seeking careers that are fulfilling and that provide gratification. Agribusiness offers that and more.