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Agriculture has long been a cornerstone of Australia’s economy. As the sector again surges - or “saves our economic bacon” - after 28 per cent growth in 2016 and high expectations for 2017, we’re again reminded of its key place in our economic mix.
The Australian Bureau of Agricultural and Resource Economics and Sciences’ (ABARES) March update reinforces the industry’s strength, suggesting our agricultural exports will beat a path to major global markets over the coming years with contributions from across various commodities.
"It’s become increasingly clear that businesses need more support to be fit for export."
Christine Linden, General Manager, Regional Business Banking at ANZ AustraliaOf course seasonal conditions will play a large role in this but underneath we need a continued focus on productivity gains.
This upward trend for agribiz has the capacity to drive confidence, optimism and opportunity in our regional communities both within and external to the sector – and around $A49 billion worth of export earnings from farm commodities in 2017-18 alone.
Where will this demand be generated? It’s hard to look past our own region with much of the international demand coming from Asia, where a burgeoning and more discerning middle class has a growing taste for protein rich diets, driving sales for our high-quality and traceable beef, lamb and dairy products.
NEW HORIZON
China dominates the new Asian market horizon but emerging markets such as Vietnam, Philippines and Indonesia are also experiencing solid GDP growth, with Australia’s nearest neighbour projected to be the fifth-largest economy in the world by 2030. And of course they hold significant and growing populations.
Many Australian businesses are taking advantage already. Data released in 2016 by ANZ shows trade into Asia from regional businesses had increased 85 per cent in the past eight years and 75 per cent of agricultural businesses were gaining substantially larger profits from their Asian ventures than their domestic operations.
The same data highlighted a massive revenue opportunity of $138 billion if Australian business acts on its intention to expand into Asia.
With such strong international potential, and a strengthening domestic economy fuelled by agriculture and a buoyant regional commercial sector, there’s little doubt more regional Australian businesses will look to Asia to realise growth.
That’s the challenge. How can regional businesses be better equipped to seize this opportunity?
INCREASINGLY CLEAR
During visits to Asian destinations with regional customers and stakeholders in recent years, it’s become increasingly clear businesses need more support to be fit for export.
The trade missions we’ve led gave delegates deep market understanding but we recognised they needed more support to alleviate the uncertainty around new market expansion – it can be quite overwhelming.
ANZ and the Export Council of Australia recently launched an online tool helping Australian businesses plan for international growth.
Be Trade Ready is a one-stop-shop providing data-driven insights on benchmarking, forecasting of revenue and capital requirements, as well as up-to-date market analysis and information on Free Trade Agreements.
The tool should become a key companion for businesses but also peak bodies and industry groups as they work to facilitate growth opportunities for their members.
With insatiable overseas demand for our clean, green, safe produce not likely to wane, improved access to helpful resources like Be Trade Ready will help improve business outcomes that drive improving economic health in agriculture and regional commerce - paving the way to sustained prosperity in regional Australia.
Christine Linden is General Manager, Regional Business Banking at ANZ Australia
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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Regional Aus: ready for the Asian trade horizon
2017-03-28
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