$100bn goal for agriculture sector achievable: Alison Watkins

Coca-Cola Amatil chief executive Alison Watkins believes making Australia’s agriculture sector a $100bn industry by 2030 is an achievable goal.

Alison Watkins says Australia has a great opportunity to expand food exports to Asia and beyond. Picture: Adam Yip

Coca-Cola Amatil chief executive Alison Watkins believes making Australia’s agriculture sector a $100bn industry by 2030 is an achievable goal and will be aided by further investment from the nation’s multi-trillion-dollar retirement savings, strengthening trade with China and diversifying into other nations such as India and Indonesia.

Ahead of the The Australian’s Global Food Forum this week, Ms Watkins said the COVID-19 pandemic had only underlined the importance of safe and secure food supplies, something Australia excelled at on the world stage.

The National Farmers’ Federation recently unveiled its goal for agriculture to be a $100bn export industry by 2030, almost doubling its current size, at a time when the sector is recovering from severe drought and facing mounting global trade tensions.

“I think it’s definitely achievable and an exciting ambition and a right ambition,” Ms Watkins said.

“The agriculture sector and food — if you want to include food manufacturing, which I think we should — it’s area of natural advantage for us as a country and I think that the COVID situation probably only amplifies that.

“We’ve always had the opportunity to do a lot more and continue to grow.

“(We have a reputation) as a clean, green country and as a country that’s handling the health crisis pretty well.

“I think we can be a safe source of supply and also a great place to invest as countries look to diversify their supply chains.

“Food is always usually a sensitive area for many countries which can’t be self-sufficient. We have so much land and water.

“Many countries import food to feed their population.

“So I think we will be an even more attractive option. Health issues are only going to become more important and will be an opportunity for us no doubt.’’

Ms Watkins said the trade relationship with China could be salvaged but Australia also needed to diversify its trade links in the region.

“It is really important we are able to find a good way forward with China but at the same time continue to diversify, which is also important, with those Asian countries, our near neighbours, that I think are going to account for something like 70 per cent of the increase in global food demand by 2050 — so an amazing opportunity right on our doorstep.

“China is a big driver of that — the rapid growth of the middle class and upper class consumers in China as well as in other markets. It is important to be participating right across the board and continue to diversify.

“We have just signed the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) with Indonesia. India is a really important opportunity for us as well as South Korea. Japan and China I think will remain important and I think there is lot of mutual benefit which will play through even if there are some short-term disruptions.

“I’m confident our proposition is going to continue to be really strong to China and all of these proximate markets.”

Ms Watkins agreed the agriculture sector needed more patient, long-term capital, much of which was coming from overseas with Australian super funds also well placed.

“There is a range of different risk/return profiles in agrifood processing but generally speaking there is a level of volatility that even if you’re downstream in food processing your ingredients or your inputs can often fluctuate quite widely. Customers are not always willing to bear those fluctuations so it can be challenging.

“And certainly upstream broadacre farming, for example, the operating returns are typically very low, maybe 2 to 3 per cent, and the long-term gains come from capital appreciation of the land.

“So as an asset class it does certainly lend itself to longer-term, patient money and I’m hopeful that some greater proportion of Australia’s retirement savings will find its way into local investment in agriculture assets.

“We certainly benefited from a lot of international investment, retirement funds having invested directly in Australian land, because they do see that long-term pay-off. We haven‘t had a shortage of capital but hopefully we can be deploying some more from our own capital.”