SUBMISSION TO THE DEPARTMENT OF PRIME MINISTER AND
CABINET
NORTHERN AUSTRALIA GREEN PAPER
AUGUST 6, 2014
Queensland Farmers’ Federation Ltd. ACN 055 764 488 ABN 44 055 764 488
PO Box 12009 George St, Level 6, 183 North Quay, Brisbane QLD 4003
Phone: 07 3837 4747 Fax: 07 3236 4100 Email: qfarmers@qff.org.au
Web Site: http://www.qff.org.au
Queensland Farmers’ Federation (QFF) is the peak body representing and uniting 15 of
Queensland’s rural industry organisations who work on behalf of primary producers across the
state. QFF’s mission is to secure a sustainable future for Queensland primary producers within a
favourable social, economic and political environment by representing the common interests of
its member organisations. QFF’s core business centres on resource security; water resources;
environment and natural resources; industry development; economics; quarantine and trade.
Our goal is to secure a sustainable and profitable future for our members, as a core growth
sector of the economy. Our members include:
o CANEGROWERS,
o Cotton Australia,
o Growcom,
o Nursery and Garden Industry Queensland,
o Queensland Aquaculture Industries Federation,
o Queensland Chicken Growers Association,
o Queensland Dairyfarmers’ Organisation,
o Queensland Chicken Meat Council,
o Queensland United Egg Producers,
o Flower Association of Queensland Inc.,
o Pork Queensland Inc.,
o Australian Organic
o Pioneer Valley Water Co-operative Limited,
o Central Downs Irrigators Limited, and
o Burdekin River Irrigators Area Committee
QFF appreciates the opportunity to present this submission to the Department of Prime
Minister and Cabinet regarding the Northern Australia Green Paper. This submission should
be considered in the context of numerous other QFF submissions (and QFF member
organisation submissions) on northern Australia development, including both current and
past processes, which most recently includes a submission to the Joint Select Committee on
Northern Australia. This submission should also be considered in context with QFF’s recent
submissions to the Agricultural Competitiveness Task Force (2014) and the National Food
Plan (2011). This White Paper / Green Paper process must also be considered in the context
of other broader industry strategies including the National Farmers’ Federation’s Blueprint
for Australian Agriculture and the Queensland Government’s Agriculture strategy, which
plans to increase the value of agricultural production to $40 billion by 2040.
The myriad of submissions and work currently available underscores the complexity
of the challenge in developing Northern Australia, and the current lack of meaningful
development in the north in proportion to the amount of study and time devoted to this
development. QFF sees that the studies and groundwork are done, and that it is past time
for government policy and action to catch up. This means we need to see sensible and
sustainable development of the north, facilitated by policies that encourage growth and
development, along with sufficient support for supply chain and logistics development, as
well as market development. Further years of study and process will only continue to resign
northern Australian development as a perpetual election pledge, presented as a colourful
headline but without subsequent policy substantiation.
QFF submission: Northern Australia Green PaperDocument1
QFF: 07 3837 4747
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QFF reiterates the following points that we made recently to the Joint Select
Committee on Northern Australia.
 Lessons learned. This inquiry must consider the existing plethora of historical and
current research in the development of Northern Australia.
 QLD Agriculture Strategy. The Queensland Government has developed a strategy
with the intent primarily around growing the Queensland sector and doing so via
strategic leadership and collaboration between Government and industry. Any
development of Northern Australia requires consideration of and collaboration with
this strategy.
 Integration. The success of further Northern Australia development will require
integration of markets; supply chains, people and industry skills, biosecurity
measures, flexible infrastructure, and stable Government policy, particularly for
international trade and environmental management. It also requires market-driven
investment in research, development and extension for national and international
arenas – delivered through an adaptive planning process capable of accepting and
responding to input from all levels, including the historical and individual experience
from current primary producers.
 Market Access. Growth in production must occur simultaneously with growth in
market demand. Australia has a highly productive and efficient farming system, but it
is also among the most expensive to operate in the world. The Australian farming
system also operates to very high environmental and sustainable standards, in line
with community and government expectations, but this comes with a significant cost
for primary producers. There is a crucial role for government and industry to educate
consumers about the cost and value of Australian-produced food. Government
appears to be gradually accepting the pragmatic reality that Australia cannot become
the food bowl of Asia per se; but that it has an important role to playing in filling
some market demands and in particular niche areas. Supporting Australian produce
is ultimately a good outcome for local economies and also the environment (both
locally and globally due to our efficient farming system), and greater initiatives for
consumer education on this matter are needed. The further development of
Northern Australia needs to engage and involve entire supply chains.
 Agriculture Planning Principles. The inquiry must consider an adaptive planning
process which includes planning instruments to support harmonious coexistence of
agricultural, industrial and urban development.
More broadly, QFF believes there are significant opportunities to further support
business and facilitate the careful strategic expansion of agriculture in Northern Australia.
However, without the right mix of investment and stable Government policy, significant
barriers and constraints may occur. The inquiry must acknowledge that Northern Australia
includes large areas of Queensland where horticultural businesses are well established and
any development outside these areas which creates an oversupply of product in the
domestic market could not be supported.
Northern Australia opportunities
The opportunities associated with population growth in Asia are becoming increasingly clear
and documented as a major opportunity for Australian agricultural value chains. Harnessing
these opportunities needs a multi-pronged approach, driven at the foundation by market
QFF submission: Northern Australia Green PaperDocument1
QFF: 07 3837 4747
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development and investment, supply chain management, sound planning principles, and
secure farm profitability and productivity.
But even before this market development occurs, farmers expect government
policies that continually seek to improve their productivity and profitability. Only when
farmers are confident in their ongoing viability are they able to have the resources to devote
to exploring and developing new market opportunities. Conversely, farmers who are under
pressure from regulatory burdens or reduced margins have little time or capital or
motivation to invest in new market opportunities. In short, this is why a partnership
between this process and the Agricultural Competitiveness Taskforce is so vital – to ensure
that government policies are underpinning the fundamentals of agricultural productivity.
This is one of the key ingredients of successful northern development.
There are a number of levers at the government’s disposal to encourage northern
development. QFF will restrict the following comments to our areas of expertise, which are
specifically agricultural policy and associated policy. Regarding northern development, the
following options should be considered and addressed:
 Transport infrastructure. Roads and railways in Far North Queensland are inadequate
to cater for a large increase in freight movement and general population growth. Any
new infrastructure needs to be of a sufficient scale and standard to be resilient to
natural disaster risks posed in the region.
 Ports. Port access must be commensurate to accommodate new development and
freight infrastructure, facilitating fast-flowing bulk freight.
 Environment. The strategy must look to harness natural resources such as water,
while recognising environmental restraints and challenges.
 Government regulation. Regulation must be efficient yet minimal, of a nature to
encourage safe and sustainable development, but not impose costs and frustration.
 Value chains. Processing and supply chain infrastructure needs to improve to match
the potential at the farm gate, driven for example through government grant
programs. It also requires integration and innovation of production systems and
supply chains.
QFF is happy to collaborate with the government and other stakeholders on specific
policy measures around each of the above. The government must recognise the will and
eagerness of existing enterprises to expand their capacity but that these enterprises are
facing restraints through all of the above. Some of the potential growth could be realised
through relatively simply grants and development programs, and in particular reinstating a
number of export develop grants that were abolished in the 2014 budget would be an ideal
starting position, with a re-focus on northern Australia.
The proximity of northern Australia to the world’s most populous and growing
countries is a major advantage. More than 40 percent of the world’s population can be
accessed via eight hours or less flying time from Cairns and even shorter times from Darwin.
Bulk freight is also at a huge advantage that must be maintained. Costs of most bulk freight
from northern Australia to China is less than half per tonne than bulk freight from Brazil,
with the travelling time is nine days compared to six weeks.
Australian Government policies must continue to maintain and enhance Australia’s
competitive proximity advantage and ensure that other costs along the supply chain don’t
increase disproportionately and thereby erode this advantage.
The demographic statistics of Asia and the growing middle class’s demand for protein
are well documented and QFF expects that more detailed commentary on this aspect of the
QFF submission: Northern Australia Green PaperDocument1
QFF: 07 3837 4747
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policy discussion will be forthcoming from others. Nevertheless, it is abundantly clear that
there is huge opportunity for Australian farm exports into this growing market and also that
realising that potential cannot be taken for granted. Without investment and development
in our supply chains, our competitors will capitalise on the opportunity ahead of us. The rise
of the New Zealand dairy industry following a Free Trade Agreement between New Zealand
and China is a notable example of the potential benefits of a positive trade deal – and the
consequences when Australia is left behind.
Another more anecdotal example comes with Australian tiger prawns, which 10 years
ago were considered to be an absolute premium product in Japan. As the rest of the world
matched our production standards, that premium has eroded. Similar risk has been
predicted to increase with a demographic change, as people born in the 1980s become the
major buying market and have a closer look at price and convenience than their parents did.
China has 93 cities with a population larger than five million (bigger than any city in
Australia). About half of the country is currently urbanised, which will increase to about 70
percent by 2050. The country has 20 percent of the world’s population but just 7pc of the
fresh water and 9pc of the arable land, which is stoking investment into Australian
agriculture and increasing the country’s concerns about food security and self-sufficiency.
The Asian population will be 4 billion by 2030, accounting for two thirds of the
world’s people. Meat consumption is predicted to double in China and southeast Asia by
2050. In 1990, beef consumption across the year was 1kg per person, but it is expected to be
10kg by 2050.
The potential is enormous and growing – just as there is the opportunity for
Queensland to realise this potential. With an estimated 38 percent of Queensland
agricultural production occurring in North Queensland, the time is right for industry,
government, and other stakeholders to partner to develop export markets out of this region.
Limitations
The infrastructure limitations in northern Australia are equally well known and documented
but, as with many aspects of northern Australia, are best understood with first-hand
experience. The sparse population and vast distances reflect the basic infrastructure
development, which becomes more acute moving away from the coast and inland as the
population becomes even lesser.
The government must partner with industry and other stakeholders to solve the
ongoing ‘chicken-and-egg’ dilemma that is associated with new industries and their need for
the necessary infrastructure to support them.
For example, in recent years there has been a serious attempt to grow cotton in the
Burdekin region near Townsville. While scientific and commercial trials demonstrated that
new transgenic varieties are capable of producing profitable yields and quality, the industry
has not established due in part to a lack of adequate supporting infrastructure. The nearest
processing facility is more than 600km away at Emerald, putting transport costs generally at
more than $60 per bale, which eroded the profitability of the venture. Without a local cotton
gin, there was understandable insufficient interest from local cane growers to commit to
cotton, while no ginning company saw it suitable to make the multi million investment in a
gin until the industry was more established. QFF looks for the government to identify
creative solutions to this ongoing and familiar challenge to northern development.
Notable northern development requires capital that cannot be supplied solely from
existing landholders or indeed from within the region. It requires a mix of capital inflows that
QFF submission: Northern Australia Green PaperDocument1
QFF: 07 3837 4747
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include corporate investors, passive individual investors, superannuation funds, active
individual investors, and foreign investors. Too often, foreign investment is used as a
political football using arguments based on negativity, fear and oversimplicity. Foreign
investment has long provided important stimulus for agricultural productivity growth and
helped support the capital value of existing land and water. This has therefore assisted
existing landholders with leveraging opportunities. Rather than focusing on the negative
aspects of foreign investment, it is the role of government to alleviate issues by ensuring
that foreign investment is monitored carefully and reported, and that foreign investors are
subject to the same taxation and other laws as existing enterprises. In addition, the
government should reinforce to Australian investors the high and long-term value of
Australian agriculture as an asset class.
The above raises the obvious question that the government should help answer: if
overseas investors can see the value of Australian agriculture, why can’t Australian domestic
investors?
Governments of all persuasions in recent years have demonstrated policy
inconsistency that has exacerbated concerns over sovereign risk (examples being the live
export ban, the blocking of the Abel Tasman fishing vessel, and the rejection of the Archer
Daniels Midland takeover of Graincorp). This inconsistency raises the risk that foreign or
other institutional investors may deem Australia too risky a place to invest. Government
policies must be clear and consistent and welcoming toward sensible investment and growth
prospects. The Government needs to recognise the role of inflowing capital to stimulating
agricultural growth.
The above issues are also related to debt issues impacting some Queensland farm
industries, and in particular the northern beef industry. These debt issues have been
heightened due to decreased asset values for northern grazing land in particular, the
Indonesian live export ban, and drought. It is concerning that there is no longer a clear
mechanism for rural industries to assess the farm debt situation. A biennial survey had been
commissioned by QRAA and the banks to gauge rural debt, but with speculation that there
could be a transition to a national survey, this QRAA report is in hiatus. It must be a matter
of government priority to see such a survey reinstated so that policy makers have a clear
understanding of the debt situation. While there have been some government measures
that are aimed at ameliorating these debt issues, it is clear that the challenge will linger for
the foreseeable future, and will be linked in many ways to the future of northern
development.
Conclusion
QFF continues to be a strong supporter of sensible and sustainable northern development.
We continue to be frustrated by the slow progress of this development and hope that this
current White Paper process will facilitate meaningful development. The opportunities are
enormous for the Australian economy, with great potential to feed millions of people across
Australia and Asia. The next step is for proactive government leadership that facilitates
collaboration and innovation in the region.
QFF submission: Northern Australia Green PaperDocument1
QFF: 07 3837 4747
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