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Entries in Food Security (11)

Monday
Oct272014

Can Australia be China's food bowl?

ARE WE LOOKING AT THE WRONG OPPORTUNITY???


Andrew Forrest's Australia Sino Hundred Year Agricultural and Food Safety Partnership wants to position Australia as China's food bowl.

The numbers, and Australia's production capacity, don't support this however - but there are certainly some opportunities we should be continuing to pursue.

 

Here are my thoughts...

 

ARE WE LOOKING AT THE WRONG OPPORTUNITY???

27 October 2014

 

Andrew Forrest has taken what he describes as “the first step” in turning Australia into China’s food bowl by announcing formation of “The Australia Sino Hundred Year Agricultural and Food Safety Partnership”, or, more sensibly, the ASA 100.

According to the ANZ Bank, “The aim of the ASA 100 is to position Australia as the primary food and agricultural product solution to China’s long-term food security and natural clothing needs”.

Without denigrating the initiative (although it is hardly a first step in exploiting the huge opportunity presented by China’s growing appetite), I wonder if the Chinese Premier Li Keqiang had a quiet smile when the two met earlier this year and Twiggy floated the concept.

My bet is that Premier Li would understand the reality – that Australia couldn’t possibly play a major role in solving China’s food security requirements by producing food, let alone become the “primary food and agricultural product solution”.

Australia can’t, and no one country can.

As Dr Craig Emerson pointed out at the ACBC Australia China Food Summit a few months ago in Sydney, Australia’s capacity to become China’s food bowl is a common misconception.

A commonly-quoted figure suggests that Australia exports enough food to feed 60 million people.  That is 4.4% of China’s population – assuming we only exported to China.  Australian agricultural product exports to China have doubled in the past five years to $7.3 billion in 2013, however, according to the Australian Food and Grocery Council, over the past 20 years Australia's share of China's food imports has more than halved to just 3.3 per cent, with our loss being picked up by “more aggressive and better organised competitors” such as France, Indonesia and New Zealand which have grown their share of the Chinese market. Our share of China's food imports contracted from 7.17 per cent in 1994 to just 3.34 per cent in 2012.

IF we could double our current food export capacity, AND export it all to China, we would theoretically be able to 120 million people – less than 9% of China’s population.

Could we double our food production capacity though?   A number of factors suggest we couldn’t.

Doubling Australia’s farm production by 2050 equates to a productivity boost of 2.5 per cent a year – which is highly unlikely given the current status quo.

Whilst some regions will see increased productivity from climate change, due to different weather patterns, Australia could see a 10 percent drop in the production of wheat, beef, dairy and sugar by 2030 unless we update the way we farm.  So we’re behind the 8-ball before we start.

I’ll use wheat as an example…

Australia is the fourth largest wheat exporter, but in real terms we account for only 3.4% of total global wheat production: There is a suggestion that we could increase production from current levels of close to 20 million tonnes to over 200 million tonnes – but the requirements to achieve this are completely unrealistic.  We would need to clear massive amounts of land and redeploy all water and all land presently used for agriculture exclusively to wheat production – crippling the rest of our food production industry.  On top of that, we would need to raise productivity from 1.5 tonnes per hectare to 4.4 tonnes per hectare.

Our track record suggests that this is almost impossible.  From the late 1970s to the 1990s Australian agricultural productivity grew at almost 2 per cent per year, but according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) there has been little growth since then.  Our last doubling of productivity took 25 years.

Recent stagnation in productivity growth is, in part, due to the drought conditions over the past decade, but we can’t just blame it all on the drought when our commitment to agricultural research has fallen from a peak in the 1970s of five per cent of the value of agricultural production, to just above three per cent in 2007.

In a global context, at 0.5% of GDP, Australia’s government spends much less on R&D and innovation than the OECD average of 0.8% and much less than the leaders (Finland and South Korea – both 1.1% of GDP). Australia ranks 28th out of 34 OECD countries for Government R&D funding.  Fortunately our R&D sector is propped up by Australia’s corporate sector which, according to Austrade, increased its expenditure on R&D at a compound annual growth rate of 12.6 per cent from 2000/01 to 2011/12, well above Australia’s nominal GDP growth rate of 6.9 per cent

This means that Australia’s Gross Domestic Expenditure on R&D sits at 2.2 per cent of GDP - above that of Singapore, Canada, UK and China.

The problem is, according to the National Farmers Federation, agricultural R&D represents only 2 per cent of the total government R&D spend.  In February 2013 The Australian reported that “…as agricultural research spending has dropped since 2000, the ability of Australia's farmers to produce more food has stagnated.  A joint research paper produced by Charles Sturt University and the Australian Farm Institute “links falling farm productivity between 2000 and 2010 with cuts to public funding of agricultural research from $1 billion to $716 million in 2008, followed by a further $150m to last year.”

Look at the cuts.  The Australian Government has, in its last budget, cut funding to

  • the Commonwealth Scientific and Industrial Research Organisation (CSIRO) ($114.8m);
  • the Co-operative Research Centre (CRC) program($80m);
  • the Rural Industries Research and Development Corporation (RIRDC) ($11m);
  • the Australian Research Council.  ARC) ($74.9m); and
  • Australian Institute of Marine Science (AIMS) ($7.8m).
  • Various Industry support and innovation programs ($845.6m)

These cuts are real, and with the passage of the appropriation bills in late June, most are already in place. Research programs are already being cut back or stopped.

State Governments have done the same thing, including Queensland, where 550 out of 2,500 jobs within its Department of Agriculture, Fisheries and Forestry (DAFF) were reportedly axed and numerous research programs were closed, and South Australia, where the last state budget saw net funding to Primary Industries and Regions SA (PIRSA) fall from $89 million to $77m, including $4m less for the South Australian Research and Development Institute (SARDI).  The sprinkling of good news was the allocation of $2.6m (over four years) for two food and wine clusters, and half a million plus to enhance food trade with China in the coming year.

To the Federal Government’s defense, the Department of Agriculture Fisheries and Forestry’s (DAFF) modest budget was increased this year from $1.6 billion to $1.9 billion, and a new Fresh Produce Safety Centre has been established in Australia, the first of its type, to research the safety of fresh food products.

Our performance has affected our reputation.  Back in mid-2012 the Australasian chief of Kraft Foods, the world's second-largest food company, said that Australia is not seen as a high-value food innovator, but as “a critical supplier of food commodities''. 

I hear what she was saying, but in China’s case, a 3.34 percent share of total food imports hardly makes us a “critical supplier”.

So, we’re up against climate chance, stagnant productivity growth, and significant cuts to food and agricultural research funding.

I think we’re solving the wrong problem.

Australia shouldn’t even be talking about becoming China’s food bowl, let alone spending money on trying to achieve this, and some of the biggest players in the industry think the same way. 

Rabobank, the world’s largest food and agribusiness specialist bank, recommended in its Agricultural Competitiveness White Paper submission that Australia should focus on developing high-value produce and move away from competing in highly commoditized global markets.

Kraft Foods argues that we should be focusing on manufactured food and that becoming a farm-gate supplier would threaten jobs, our own food security and even the national economy.  There are two sides to every argument, and I’m one of those people who prefers to make pasta sauce with tomatoes that I’ve peeled myself rather than those that have been peeled and pre-cooked in a factory and shipped in a can.  China can buy tinned food from anywhere, but they can only buy top-quality fresh Australian food from one place.

I think we’d be smart to concentrate on exporting fresh and farm-gate produce. 

Australia can't solve China's food security issues, and in fact I would argue that we don’t, and won’t, play any significant role in China's food security equation.  What we can do, what we are starting to do, is excel in the provision of high quality, safe, premium food products.  Australia has a solid reputation for producing clean, green, health and safe food, and we should be leveraging this to its fullest potential.

I think we would be even smarter though, and have a bigger impact on food security in China, our region, and globally, if we redoubled our investment in farming productivity and food innovation.  We should be exporting our expertise and collaborating with other countries that have developed their own expertise. This is a two-way street, and would help address food security concerns (those of our own as well as our global neighbours) far more than any additional food we could produce.

Australia is cutting funding to an already under-funded food and agriculture research community, and now backing a program that can never achieve its stated objective of becoming China’s “primary” food bowl. 

Don’t get me wrong.  I’m a huge supporter of the concept of increasing our export trade with China.  The attention being given to the China opportunity is welcomed and timely, but it will only really mean something if the Governments and corporates put their money where their respective mouths are.

The highest priority of Twiggy’s new ASA 100 should be, in my opinion, to trigger a pivot by the Federal and State Governments and have them dramatically ramp up investment in, and support for, research into food and agricultural technologies, and the commercialization existing and new Australian expertise.  This must include serious incentives for Australian businesses to invest in the research and production sectors.

I’m worried that the current aim of the ASA 100 is distracting Government and business from the real opportunity – the provision of high-quality premium foods for China’s upper and growing middle class, and the provision of Australian food and agricultural expertise for Chinese producers.

We should be leveraging our reputation for clean, green, healthy and safe, and leveraging our expertise and experience, instead of trying to become a bulk supplier.

I have to ask the question:  Is the ASA100 really looking at the right opportunity?

 

About the author:

Gareth Lott is a member of the Australia China Business Council and sits on the ACBC Agribusiness subcommittee in South Australia, he owns a china-focused aquaculture company, and, through his family business, operates several small-scale farms in regional South Australia.  Gareth is also a member of the Australia Arab Chamber of Commerce and Industry and the Australasia Representative of the Global Forum for Innovations in Agriculture in Abu Dhabi. This article is Gareth’s personal opinion only and is not endorsed by any of the above organizations.

 

© October 2014 Gareth Lott

E&OE


Tuesday
Sep022014

Global Aquaculture: Australia’s Role in Meeting Industry Challenges

This article was published on the Future Directions International website here

It was written by Matthew Curry, Research Assistant, Global Food and Water Crisis Research Programme

 

Global Aquaculture: Australia’s Role in Meeting Industry Challenges

Wednesday, 27 August 2014

Aquaculture is rapidly expanding and showing promise as a means of decreasing poverty rates and improving food security globally. Australia’s world-leading aquaculture companies have demonstrated their potential to pioneer the advancement of this important industry.

Background

Aquaculture – the breeding and harvesting of aquatic organisms – has grown substantially in recent decades. Despite this, long-term mismanagement of the world’s fisheries has led to a decline in world fish stocks, placing increased pressure on aquaculture to meet global demand. Fish consumption has been linked to improved nutrition and poverty alleviation; thus, sustainably managing this expansion is essential. 

Comment

Seafood Intelligence – an independent international seafood market news and information service – has benchmarked Tasmanian salmon producer Tassal as the world’s top salmon farming company, based on corporate, social and environmental responsibility and sustainability. This report was accompanied by an Australian first: Aquaculture Stewardship Council (ASC) accreditation for Tassal’s Macquarie Harbour farms. The award comes at a time of global growth in aquaculture, which is increasing the availability of fish as a safe and healthy food option.

Aquatic produce is a source of income and food security for more than 500 million people in developing states. Fish is high in protein and essential oils: vital components of a balanced diet. Low incomes restrict many people from accessing such essential sources of protein, however. Therefore aquaculture’s capacity to provide a source of protein and income for those living in poverty is invaluable to developing populations. That potential is complicated, however, by inherent sustainability issues.

Aquaculture, if poorly managed, can contribute to widespread environmental degradation. This includes reduced water quality, stock disease and damage to ocean ecosystems due to fish feed extraction. All of these negative effects must be addressed to ensure the successful expansion of aquaculture.

Although Australian aquaculture accounts for just 0.36% of global production, the high quality and sustainability of Australian products and production systems have made Australia an industry leader worldwide.

Developing alternative feed sources is vital to the expansion of agriculture. The Australian government and aquaculture industry leaders can assist in this area, through research and resource provisions. Aquaculture cultivates high value fish that are often carnivorous; they are fed smaller and lower value fish extracted from the oceans. This, however, can upset the ecosystems and food chains in the oceans. The Australian government is currently investing in a joint aquaculture research programme with Vietnam, to find alternative, sustainable feed sources. Solving this problem will require co-operation between all stakeholders, i.e. governments, policy makers, commercial farmers, smallholder farmers and subsistence farmers around the world. Programmes such as these are a step in the right direction for the industry’s future.

In developing countries, many aquaculture enterprises are only designed for subsistence farming. The strict food, health and safety standards required for exports, often bar smallholder farmers from gaining access to global markets, which limits their potential to improve their livelihoods. Australia’s extensive knowledge and expertise in health and safety standardisation could be applied to help develop these smallholder farms.

Aquaculture will continue to expand as the demand for fish increases; however, that growth will need to be sustainable. This is essential to uphold aquaculture’s promise in addressing food insecurity and poverty issues. Australia has the potential to contribute significantly to the sustainable development of global aquaculture, by assisting smallholder farmers in developing nations who lack the systems, skills and technology to gain broader market access. The collaboration of Australian firms with other countries and stakeholders can assist in achieving greater food security globally.

 

 

Thursday
Aug282014

GCC REGION EMBRACING AQUACULTURE

The following article was published on the bqdoha.com website on July 23 2014. It was written by Dada Zecic Pivac

GCC adopting aquaculture

As the population in the GCC is growing, so is the demand for protein. Fishing, a traditionally important industry in the Gulf, cannot meet the demand due to sharp decline of fish stock, caused by overfishing and pollution. In search of solution, the region is turning to fish farming.

 

fishing, GCC, aquaculture

 In two years’ time the coast of Oman will become home to one of the biggest aquaculture facility in the region. The $80 million project will involve inland aquaculture, cage farming, and mariculture. Emirates Star Fisheries, presently in search of investors, announced their the aim to produce 13,000 tonnes of fish a year by 2018. The farm is expected to produce 3,000 tonnes of fish in 2016; 8,000 tonnes in 2017 and 13,000 tonnes in 2018. This includes 10,000 tonnes of shrimp and 3,000 tonnes of tuna, cobia and sea bream. This newest aquaculture project, announced in Dubai beginning of June, is expected to be supported by all GCC countries and reflects continuous effort to produce more food locally.

Fishing has always been an important industry in the Gulf, worth $272 million a year, but because of sharp decline of fish stock, due to overfishing and pollution, the region is turning to fish farming. It’s an attempt to meet the increasing demand for protein owing to the growing population. Fish consumption in the GCC is estimated at 10 kg per person per year, with UAE topping the regional rankings in the consumption of seafood with 33 kilograms per capita. Population growth and rising affluence means increasing demand for fish, and it is projected to grow at around eight percent a year up to 2030, reaching 900,000 tonnes by that year in the UAE. Experts predict that fish supply in GCC countries must increase 20 percent to meet the region’s current levels of consumption.

fishing, GCC, aquaculture

Spangled emperor fish – an increasingly depleted species.

 

Oceans running out of fish

 According to the Food and Agriculture Organization (FAO) May report, fish production in the Middle East has been gradually increasing since 1961 at a growth rate of 16 percent. Egypt is the biggest producer in both capture fisheries and aquaculture, supplying 40 percent of the total volume. In second place is Iran (21 percent), followed by Turkey (19 percent), Yemen (6 percent), and Oman (5 percent). Kuwait, Qatar, Syria, Lebanon and Jordan are the bottom of the producers list.

Decline of the fish stock in the region is alarming: according to some reports 70 percent of Saudi Arabia fish in the Red Sea have already vanished because of the pollution, while in Arabian Gulf some species (the popular orange-spotted grouper – known as hammour – the spangled emperor fish or shaari, and kingfish) are being depleted due to overfishing – most of the fish being caught before they have a chance to reproduce. It is estimated that 70 percent of the volume of fish, caught by commercial fishing boats, comes from species that are over-fished.

In 2002 UAE estimated their fish stocks at 1,735 kg per square kilometer. By 2011 the number dropped to 529 kg per square kilometer. In 1975, stocks were estimated at 9,100kg per square kilometer.

Aquaculture can be the answer to the problem, since fish farming imposes no strain on precious freshwater resources: the impact on the environment can be minimized by using seawater at onshore facilities and recycling it. According to FAO report, out of a total of 2.4 million tonnes of fish produced in the Middle East in 2001, 78.6 percent was supplied by capture fisheries while only 21.4 percent was supplied by aquaculture farming. In 2011, out of a total of 3.4 million tonnes, 56 percent was from capture fisheries while 44 percent was contributed by aquaculture. For GCC region, recent data shows aquaculture is the fastest growing food processing sector: farmed fish output across the region has grown five-fold in a ten year period, from 194,000 tonnes in 2002 to 1.1 million tonnes in 2012, with Oman and Saudi Arabia as leading investors in the industry.

 

Big investments

fishing, GCC, aquaculture

Sur fish market in Oman. Credit: Ji-Elle

 

In December the Saudi Arabian Ministry of Agriculture announced that it would inject an additional $10.6 billion into aquaculture projects to produce one million tons of fish in the next 16 years. The development, chanelled mainly through the state owned National Prawn Company, also includes USD 1 billion international investments in a 31,000 hectare aquaculture project in Mauritania.

In 2012, KSA imported nearly 175,000 tonnes of fish worth around $370 million. Saudi Arabia’s fish production was estimated at around 100,471 tonnes in 2012, and the demand is predicted to soar to an all-time high of around 286,000 tonnes in 2025 due to the population growth.

Oman, the country on the forefront of region’s fishing industry, is planning to invest USD 1.3 billion in fisheries’ development by 2020, with government granting aquaculture license to 19 projects worth $332 million, in 2014. Today, fishing industry sustains the livelihoods of some 40,000 Omanis. Government plans to produce 480,000 tonnes of fish and create 20,000 jobs by 2020, and officials estimate direct returns from fishing and fish processing activities to climb from $960 million today to $1.9 billion in 2020. Oman is exporting 50 percent of the catch, mainly to neighboring countries, while local consumption is currently 27 kg per person per year.

In Qatar investments in fish farming are also welcomed. Ministry of Environment (MoE) statistics for 2012 revealed that the local produce of fish fell short of the consumption needs by around 20 percent. Like in the neighboring countries over-fishing can put the natural reserves of fish at risk as the current local production is at the maximum level allowable for fresh fish. But aquaculture in Qatar is still in its infancy – according to FAO data, in 2010 reported aquaculture production in Qatar was meagre 35 tonnes, while fish consumption per capita is estimated at 20.8 kg a year.

UAE has many new aquaculture projects planned as well, including the production of high value seafood, such as Middle East’s first farm for sturgeon caviar and salmon.

With the population growth rate of 1.3 percent per year, the seafood industry is expected to have to double in the next 45 years if the present global seafood per capita consumption of 18.4 kg is to be maintained. Aquaculture is currently supplying nearly 50 percent of the global fish consumption, while global aquaculture market will reach USD 202.96 billion by 2020.

 

Tuesday
Aug192014

Fish supply in the Arab States

Arab fisheries resources, capture and farmed, are considered very important sectors for development in the Arab world.

If rationally and scientifically exploited, fisheries could play an important role in meeting increased demand for food and in spearheading the economies of several Arab states.

This two-part article reviews the development of fisheries in general and aquaculture in particular in the Arab World and discusses the challenges ahead for sustainable aquaculture.

Each part will open or download as a pdf.

 

 

Tuesday
Aug192014

Fish prices hit record high as catch drops

Source: The Peninsula, Qatar, August 19, 2014 - 2:08:36 am

DOHA: Prices of popular varieties of fish, especially hamour, have gone through the roof this summer. 

The prices of hamour, the most sought-after item by sea food lovers, have hit QR100 per kg in the retail market, which according to market sources is a record high.

Due to poor catch, fish prices always go up during summer. But this time, prices are phenomenally high. The prices of hamour have never gone beyond the QR85-QR90 range, market insiders told this daily yesterday.

According to the Ministry of Development Planning and Statistics, over 200,000 people, including Qataris and expatriates, are out of the country. It shows that the prices of fish have gone up at a time when there is lower consumption.

Poor catch, coupled with alleged market manipulation, are the twin reasons cited by sources for the high prices. The difference in retail and wholesale prices ranges between QR10 and QR20 per kg compared to the prices prevailing in the Central Market (Qatar’s wholesale market), a local Arabic daily said.

For example, hamour, whose prices during normal seasons fluctuate in the range of QR40-QR65, is available at QR80 a kg in the wholesale market. However, it is being sold at QR100 at some retail outlets and hypermarkets, meaning an  additional profit of 25 percent (QR20 per kg).

Another popular fish, kanaat, is available at just QR40 a kg in the Central Market, but is being sold at QR70 per kg by retailers. 

Customers wonder why prices are so high in retail market when there is no shortage in supplies of most varieties of fish, and they are readily available in adequate quantities in the wholesale market. 

Some traders argue that the hike in the prices is due to the decline in supplies of hamour due to low catchments (since the fish has a tendency to go deep down into the water during summer months). Those not able to afford hamour at the prevailing prices are compelled to buy substitutes such as samman, safi, and zubaidi, pushing the demand and prices of other varieties. 

Given the skyrocketing prices, customers urge authorities, including the Consumer Protection Department, to ensure effective monitoring of fish prices.

Some have raised concerns about the auctioning of fish in the Central Market being allegedly influenced by some middlemen and big traders. 

Traders argue that with the approaching summer, the supply of hamour and some other varieties of fish has declined and, therefore, prices of other varieties have also gone up due to substitution effect.

Traders at Central Market say they are working on marginal profit which is sufficient enough to recover the wages of workers, rentals of shops and electricity and water bills. 

In contrast, many fishermen have expressed apprehension and complain that some big traders, with the connivance of middlemen and others,  are working to influence the auctioning of fish and prices. 

However, traders rubbished such allegations and said the auctioning of fish takes place under the close watch of authorities so there is no possibility of price manipulation.

THE PENINSULA