Canberra, Saturday 4 February 1995
Today's forum is entitled "Science and our food: from farm to supermarket shelf"
- in my opening address, I want to ensure that in your subsequent discussions it is clear that the "supermarket shelf" can be located in Canberra, Jakarta, Hanoi or Osaka
- in fact, in any number of centres in Asia and around the world.
Gone are the days when the agri-food sector was limited to the domestic market
- and, to a significant extent, it is developments in science and technology which have made expansion of the export of food and food products possible.
Traditionally, Australia has supplied unprocessed and semi-processed agricultural commodities to the world market
- such as cereals, meat, dairy products and fruit.
But it is the higher value-added processed foods which are rapidly emerging as an important export growth sector.
To successfully export food and food products requires considerable time and market research to determine demands of different tastes
- scientific research makes it possible to adapt products to satisfy these different preferences.
Scientific research has also become an important factor in getting products, especially fresh fruit and vegetables, to overseas consumers in an acceptable and desirable condition.
There are many major opportunities and challenges facing our food exports, particularly in Asia
- the Government is responding to them
- and I believe the research community has a vital role in supporting industry to make the most of the opportunities and confront the challenges.
Opportunities for Growth
- Asia is where the opportunities for our agri-food exports are the greatest
- our total food exports to the world totalled A$10 billion in 1992
- with 65 per cent going to Asian countries
including seven of Australia's top ten markets
- we export more food to just South Korea and Indonesia than to the whole of West Europe.
We're all familiar with the economic revolution sweeping through the Asian region.
And economic growth has brought sharp rises in per capita incomes
- and the rapid emergence of middle classes with significant discretionary spending power.
McKinsey and Company estimates that, by the year 2000, 80 million people in Asia, excluding Japan and China, will have incomes of more than $US10,000
which is double the number in 1988.
The result of this increasing affluence has been to increase consumption of traditional foodstuffs such as rice, fish, fruit and vegetables
- and, importantly, to diversify the pattern of food consumption to include alternative cereals such as wheat, and meat, dairy products, and temperate fruit and vegetables.
This increase and diversification of food consumption is generating tremendous demand from the region for Australian food and agricultural products, and other goods and services which we can provide competitively.
And as the figures for our food exports to Asia - A$6.5 billion in 1992 - show, our performance here has been very solid, and reflects such strengths as
- Australia's traditional advantages in competitive, high quality agricultural production both for direct export and for supply of raw material to the Australian food industry
- a sound manufacturing and technological base
- good management and marketing skills
- and proximity to our major markets in Asia.
We've certainly shown we are able to build on these strengths, and science has played a pivotal role
For example
1) the Australian beef industry has had to come to grips with changes in production and processing technologies to deliver fresh, chilled, predictable-quality product to North Asian markets
- involving, for instance, building predictability into the relationship between genetic base and meat quality
- enabling farmers to more consistently match consumer requirements
2) in the rice industry, research has extended from seeds to by-products
- varietal improvement has been an important focus allowing, for instance, the development of fragrant varieties in the early 1980s to replace similar imported rice varieties
- pest resistance, high yields, and even early maturity and cold weather tolerance have all been enhanced by the work of researchers
3) the Atlantic salmon industry sought to establish high quality standards from its early days, and insisted on no use of chemicals and antibiotics
- and the development of leading techniques in feeding has played an important role in maintaining fish health and product quality
4) in the wine industry, too, science has played its part magnificently
- in the recently published ''Oxford Companion To Wine", Jancis Robinson says, '...Australia will be credited with having had an enormous influence on the wine world of the late 20th century...their winemakers now travel the world...quietly infiltrating all manner of wineries with Australian technology..'
- since the 1960s, Australian wine researchers have led the world with their work on the chemical composition of grapes and wine
- and I'm sure many in this room wish them well with this important work.
To assist maximise the potential that scientific research has given our agri-food industries, the government is heavily involved in trade promotion and negotiating market access.
Trade Promotion
The internationalisation of Australia's economy over the past decade has gone a long way toward shifting the emphasis from a "production driven" culture to a "consumer driven" one
- but there are still too many examples of businesses which aim to sell what they produce, rather than produce what they can sell.
The vital importance of understanding our export markets - and developing strategic linkages with them - couldn't be clearer.
In this context, there are three key areas where the Government, working in particular through AUSTRADE, plays a major support role for Australian companies.
- First, AUSTRADE helps companies apply world best practice to products, packaging and shelf life to better appeal to market tastes and requirements
- working closely CSIRO, the Food Research Institute and the research arms of the agricultural statutory marketing authorities to identify the exact requirements of overseas buyers
- particularly Asian buyers
- and using business development programs, such as the International Trade Enhancement Scheme and the Innovative Agricultural Marketing Program (IAMP), to assist companies to develop world class production methods and processes.
Second, AUSTRADE helps companies develop cost-effective methods to promote Australian foodstuffs to overseas buyers
- through targeted offshore trade promotions
- and through carefully formulated promotional campaigns like the Clean Food Program ("Clean and Green")
- which are all underpinned by science
- science helped get us this far and is the key to future success.
And third, AUSTRADE brings together food suppliers from Australia and food buyers from overseas in joint manufacture and supply arrangements
- so that the overseas customer requirements are fully incorporated into the design, taste and packaging of product for foreign markets.
These approaches are highly practical and they are producing real results
For example
1) Queensland's Matilda Fresh Foods is the first Australian company to successfully export large quantities of fresh broccoli to Japan
- increasing its sales from 6000 cartons in 1991 to over 115,000 cartons in 1993
- with the help of funding from IAMP
- which allowed the company to research the market, analyse its competitors, improve production techniques and strengthen its marketing effort.
2) Tatura Dairies, with investment and cooperation from the Japanese Snowbrand Group, is producing milk powder for Asian markets
- exporting A$30 million of product last year, with prospects of total sales to Asia worth A$250 million over the next four years
- with the help of concessional loans of A$3 million from ITES to develop its product and export markets.
Market Access
Fair access to overseas markets is, of course, a prerequisite for the development of our export potential
- and the Government has been highly active in seeking to improve access for Australian firms.
The Government has consulted widely with industry to determine market access priorities.
One particular avenue for consultation between Government and the private sector is the Processed Foods Market Access Committee
- established as part of the Agri-Food Industries Statement, and chaired by the Department of Foreign Affairs and Trade.
The Committee's purpose is to advise on priorities for bilateral trade negotiations, and to develop coordinated strategies with industry on improved market access
- and inform industry about developments in market access arrangements which might offer significant opportunities.
Improving Quality
If the potential for export is to be fully realised, it's absolutely essential that products meet market requirements.
National policies to ensure safe food supplies, and to meet specific market requirements for use of agricultural and veterinary chemicals, will be increasingly important issues in world trade
- as last year's incident involving residues in export beef so clearly showed.
Of course, the Government must remain vigilant to ensure such requirements aren't simply new non-tariff barriers to trade
- but the reality is that customers will progressively move towards an insistence that foods they import are produced under recognised quality assurance procedures
and exporters will need to pay greater attention to quality assurance in order to remain competitive.
The recent program commenced by the Cattle Council of Australia, with Government financial support, to develop quality assurance at the farm level is the sort of initiative we welcome in this area.
The Role of Science
In closing, a few comments on the role of science and the research community in meeting the challenges facing our food exporters.
Science has the capacity, already well demonstrated in the history of Australian agriculture, to improve the technical and cost competitiveness of the agri-food industry.
The importance of innovation in technology and design, for instance, was highlighted by the Prime Minister's Science and Engineering Council Report
- an important finding of which was that companies which invested in research and development, and innovation, to develop new products specifically for export markets enjoyed nearly twice the growth of companies which simply exported products made for domestic markets.
Another important development in the processed foods sector has been the recent establishment of the Australian Food Industry Science Centre
- drawing together existing food research, and aiming to promote the growth of exports of processed and value-added foods making use of Australian agricultural and horticultural ingredients and technology.
Improvement of quality assurance and safety is a challenge in which science must be closely involved
- long term market success will require much greater attention to research and infrastructure necessary to provide assurances on quality and safety
- key issues include the need to minimise chemical use, consistent with sound agricultural practice
and the rising concern of export markets over microbiological contamination.
In short, for our food industries to prosper, we must gain a better understanding of what the customers want and produce it competitively - at both the farm and the factory - to meet exacting and increasing consumer requirements
- with, of course, the helping hand of the scientific community.......................................Thank you.