Our Northern Australia Food and Fibre Supply Chains Study identified markets for irrigated agriculture across northern Australia, and the critical supply chain and infrastructure investments needed to maximise those opportunities.
Agricultural opportunities in the north
A number of opportunities have stimulated renewed interest in agricultural development for northern Australia. These include:
- proximity to growing Asian markets
- increasing global demand for food and natural fibre
- development of economically sustainable regional communities, particularly as a consequence of expansion of mining and energy extraction developments.
Challenges for development
Expanding agricultural development in northern Australia presents three direct challenges:
- Sourcing the capital investment to support the high cost of 'greenfields' agricultural development.
- Cost-effectively and sustainably growing crops in the northern environment and getting them to market via efficient supply chains.
- Establishing new and viable export markets for crops that are not simply accommodated by the global commodities trade.
Successfully addressing these challenges is critical to establishing and realising the value proposition for northern agricultural expansion.
Understanding the opportunities and challenges
We worked with the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) to provide policy makers with a clear indication of the location and scale of medium and longer term opportunities for agricultural production across northern Australia, and critical supply chain and infrastructure investment issues that may help to foster those opportunities.
The work was supported by a consortium of stakeholders, each with an interest in seeing northern Australia reach its potential. These include:
- the Australian, Queensland, Northern Territory and Western Australian governments
- the Rural Industries Research and Development Corporation (RIRDC)
- and Regional Development Australia (RDA) Pilbara.
Key messages from this project
- Irrigated agriculture in northern Australia has the potential to add considerable value to regional economies.
- Securing water for irrigated agriculture does not guarantee positive financial returns.
- Supply chains are a significant constraint in some locations.
- New markets are critical, especially for high value horticultural production.
- Processing facilities and supporting infrastructure are needed in most regions.
- There are opportunities to integrate crop production with the beef industry to create a value-add in both sectors.
- Infrastructure investment needs differ significantly between regions.
- Investment plans need to be designed to accommodate unexpected shocks.
- Labour supply and agri-business services are important to achieving successful new agricultural initiatives.
- Successful agricultural development will depend on understanding the entire system including climate, soils, water resources, pests, agronomy, management, processing, supply chains and markets.
- Regional economies are projected to expand but changes to national economic welfare are negligible.