Science and Australia's place in the world
What are the national opportunities that come from our unique strengths and capabilities?
In a resource constrained world, basic resources like food, water, energy, marine life and mineral resources will show shifts in supply and demand and shifts in market prices.
We all understand the importance of the minerals and energy sector to the nation. Australia has 75 advanced minerals and energy projects with planned capital investment of A$109.6 billion. This investment is driving increasing efficiency across the whole supply chain and new innovation such as one of the world’s largest CO2 storage projects at Gorgon.
What other opportunities are arising that build on our strengths and will require innovation?
Food production demand is likely to increase by 50 to 80 per cent between now and 2050. We won’t meet that demand without new science and innovation.
Food security is an issue for many countries. For Australia as a net exporter of food it is a potential opportunity if supply and demand changes can drive real price increases.
Australia produces just over 1 per cent of the world’s total food and about 3 per cent of global food trade. In 2009-10 food exports were A$24 billion and total imports were A$10 billion.
Terms of trade for Australian farmers have declined over the last 30-40 years with some levelling off of the decline in the last 10 years. Terms of trade have declined by around 2 to 2.5 per cent per year. Farmers have been able to stay in business only by improving productivity by a similar amount to stay competitive.
So we will need consistent, real price increases before we see significant volume shift and value to the farmers.
Population pressures and coastal urban growth and supply constraints are likely to drive a rise in the fundamental seaborne trade commodities of carbohydrate, protein and fat. The recent 60 per cent increase in wheat prices and 12-15 per cent meat prices in response to supply issues in Russia and regulation changes in Indonesia respectively indicate shifts in demand and supply can have real price impacts, however we will need to see sustained increases and less volatility.
The plant and animal science that was so critical to establishing our agricultural sector will again underpin our global competiveness. Australian science leads the world in the understanding of the wheat genome and was a leading contributor to the recent completion of the bovine genome.
Lampard M. 2010. Commodity analysts, Minerals and energy Major development projects – April 2010 listing. Australian Bureau of Agricultural and Resource Economics, http://adl.brs.gov.au/data/warehouse/pe_abarebrs99001672/ME09_Oct.pdf [external link].
ABARE-BRS Conference Paper 10.15 Agricultural and Food Policy Choices in Australia 26-27 Oct 2010 Brussells.
Mullen JD. 2007. Productivity growth and the returns from public investment in R&D in Australian broadacre agriculture. Australian Journal of Agricultural and Resource Economics. 51, 4: 359-384.