Australia's Role in Feeding the World : The Future of Australian Agriculture [1 ed.] 9781486305902, 9781486305896

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This highly topical book draws together the latest intelligence on the sustainable production and distribution of food and other products from Australian farms. It examines questions that policy-makers, farmers, politicians, agricultural scientists and the general public are asking about the potential productivity of our arable land, the environmental and economic impacts of seeking to increase productivity, and the value of becoming cleaner and greener in our agricultural output. With chapters on the emergence of new markets, consumer trends in China, the biophysical constraints on agricultural expansion, and the various products of Australian agriculture and aquaculture, Australia’s Role in Feeding the World provides valuable insight into the future of agriculture in this nation.

About the editors

Sarah Blagrove is an Environmental Scientist at a large international construction company. She earned an Award for Excellence from the Australian Council of Environmental Deans and Directors, and is engaged in postgraduate research based on food security on a part-time basis. Hannah Ditton has a degree in Sustainable Environments and Planning, majoring in Urban Design and Planning. She has worked for the Green Building Council of Australia where her passion for sustainable development and planning originated.

Australia’s Role in Feeding the World The Future of Australian Agriculture

Editors: T. Hundloe, S. Blagrove and H. Ditton

Tor Hundloe is a pioneer of environmental and natural resource economics. He has researched and taught at the University of Queensland, Griffith University and Bond University. He was also a Commissioner of the Industry Commission, where he undertook a public inquiry that changed water allocation and use in Australia. In 2003, Tor was made a Member of the Order of Australia (AM) for his contributions to natural resource management and awarded a Century Medal for his contribution to education.

Australia’s Role in Feeding the World

Earth’s human population currently exceeds 7 billion, and by the year 2050 our planet will have at least two billion more mouths to feed. When faced with providing food for so many people, the idea is often advanced that Australia will become the ‘food bowl’ of Asia. Australia currently grows enough food to feed about three times its population and agricultural exports are important to our economy; however, Australia’s role in feeding the world needs careful consideration.

Editors: Tor Hundloe, Sarah Blagrove and Hannah Ditton

Australia’s Role in Feeding the World Editors: Tor Hundloe, Sarah Blagrove and Hannah Ditton

© Professor Tor Hundloe, Sarah Blagrove and Hannah Ditton 2016 All rights reserved. Except under the conditions described in the Australian Copyright Act 1968 and subsequent amendments, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, duplicating or otherwise, without the prior permission of the copyright owner. Contact CSIRO Publishing for all permission requests. National Library of Australia Cataloguing-in-Publication entry Australia’s role in feeding the world: the future of Australian agriculture / Tor Hundloe, Sarah Blagrove and Hannah Ditton. 9781486305896 (paperback) 9781486305902 (epdf) 9781486305919 (epub) Includes bibliographical references and index. Food supply. Food security Food consumption forecasting. Food supply – Australia. Sustainable agriculture – Australia Sustainable development – Australia Blagrove, Sarah, author. Ditton, Hannah, author. 338.19 Published by CSIRO Publishing Locked Bag 10 Clayton South VIC 3169 Australia Telephone: +61 3 9545 8400 Email: [email protected] Website: www.publish.csiro.au Front cover: World map of grain on plate (Great Divide Photo/Adobe Stock) Set in 10.5/12 Minion Pro and ITC Stone Sans Std Edited by Elaine Cochrane Cover design by Andrew Weatherill Typeset by Desktop Concepts Pty Ltd, Melbourne Index by Bruce Gillespie Printed in China by 1010 Printing International Ltd CSIRO Publishing publishes and distributes scientific, technical and health science books, magazines and journals from Australia to a worldwide audience and conducts these activities autonomously from the research activities of the Commonwealth Scientific and Industrial Research Organisation (CSIRO). The views expressed in this publication are those of the author(s) and do not necessarily represent those of, and should not be attributed to, the publisher or CSIRO. The copyright owner shall not be liable for technical or other errors or omissions contained herein. The reader/user accepts all risks and responsibility for losses, damages, costs and other consequences resulting directly or indirectly from using this information. Original print edition: The paper this book is printed on is in accordance with the rules of the Forest Stewardship Council ®. The FSC® promotes environmentally responsible, socially beneficial and economically viable management of the world’s forests.

Contents

About the editors List of contributing authors Acknowledgements

Introduction and a mud map

vi viii x

1

T. Hundloe

SECTION 1 THE BIG PICTURE 1 Feeding the planet’s growing population

9 11

T. Hundloe

2 No escaping demand and supply

23

T. Hundloe

3 The global food supply

35

T. Hundloe

4 Australia’s role

53

T. Hundloe

5 Trade, foreign investment and comparative advantage

73

T. Hundloe and J. Chiomey

SECTION 2 BIOPHYSICAL LIMITATIONS

85

6 Climate, rainfall, dams, bores and irrigation

87

C. Attard

7 Soils and underground critters

103

S. Cantwell

8 Australian fisheries resources

117

D. McPhee iii

iv

Australia’s Role in Feeding the World

SECTION 3 HUMAN AND POLITICAL DIMENSIONS 9 Tar and cement, big holes, small wells and pipelines

123 125

T. Hundloe and H. Ditton

10 When is a tomato not a tomato?

133

H. Ditton and T. Hundloe

11 Waste not, want not: the case of the bent banana

139

A. White, D. Gallegos and T. Hundloe

SECTION 4 AUSTRALIA’S AGRICULTURAL EXPORT PRODUCTS 12 Growing grains in Australia

147 149

S. Blagrove

13 Our Andy’s gone with cattle now

167

T. Hundloe

14 Horticulture

179

J. Chiomey

15 Sweet dreams of sugar

187

J. Chiomey and T. Hundloe

16 The chicken before the egg

191

J. de Miranda

17 Eggs

199

J. de Miranda

18 Australian fisheries production

203

D. McPhee

19 Milking the cow

211

T. Hundloe

20 Wool, lamb and mutton

217

T. Hundloe

21 Cotton A. Solakovic

227

Contents

22 A case study of agriculture: the Atherton Tableland

233

T. Hundloe

23 Farming the sun and wind

237

T. Hundloe and S. Sharma

SECTION 5 TOWARDS A SUSTAINABLE FUTURE 24 A blueprint for clean, green Australian agriculture

241 243

T. Hundloe, S. Blagrove, S. Cantwell, J. de Miranda and H. Ditton Endnotes References Index

252 254 259

v

About the editors

Tor Hundloe spent the first six years of his life on a dairy farm in the Gold Coast hinterland. He then spent two years on his grandparents’ farm in northern Norway. This farm grew native trees that were harvested on a sustainable basis for making paper. On returning from Norway, Tor spent some time on his great-uncle’s mixed fruit and vegetable farm on Macleay Island in Moreton Bay, outside Brisbane. He then returned to a family friend’s farm in Numinbah Valley, in the Gold Coast hinterland. He learned to cultivate paddocks walking behind a plough pulled by a draught horse. Eventually a rotary hoe took away the horse’s job. After schooling at the one-teacher school at Numinbah Valley and the much larger state school at Burleigh Heads, Tor went to high school in Brisbane while retaining his links to the Gold Coast. On leaving high school Tor joined the wool-broking firm Australian Estates, where he undertook a wide range of duties, from attending wool auctions to record the bids to consigning bales of wool to overseas destinations and working as a general wool handler in the wool stores that covered a large part of the Brisbane suburb of Banyo. These stores were built when the Second World War caused wool shipments overseas to cease. Ironically, by the time Tor started work in the wool industry, much of Australia’s wool was being shipped to Japan. While engaged in these various work activities, Tor attended night classes at the Brisbane Central Technical College to gain a Diploma in Sheep and Wool. He then entered a new phase of his rural life, moving around the nation as a roustabout in shearing sheds. By the age of 18 he was a qualified wool classer, thought to be the youngest in Australia. This was an era of rather crude accommodation for shearers and roustabouts. The wool classer would have his own hut, or reside in the owner’s/manager’s homestead. On cold winter’s nights when the tank water tap ran dry due to the ice in the spout, shearers and shed-workers would use a hessian wool bale as a blanket-cum-doona. To read at night, a carbide light was lit. These were known to be dangerous. Vic Priddle, in his autobiographical yarn Dung on His Boots (W. Brooks, Brisbane, 1972), tells the story of a farmer killed by the explosion of a carbide light. Most were luckier, as was Tor Hundloe. Tor remained in the wool industry for many years, undertaking a variety of jobs, with wool classing/wool sorting and pressing bales of wool the major ones. In his mid-twenties Tor returned to formal education, night school over a period three years, to gain entry into university. Tor Hundloe has academic qualifications from the three universities in Brisbane: Queensland University of Technology, the University of Queensland and Griffith University. He has a Bachelor of Economics (Honours) and Doctor of Philosophy. He has taught at all the same universities, as well as run semester programs at the University of Indonesia, Chulalongkorn and Prince of Songkla universities in Thailand, and the University of Malaya. He has delivered lectures in the United States, the United Kingdom, Sweden, Norway, Fiji and Canada. He was appointed as Professor of Environmental Science and vi

About the editors

Management at Bond University in 2008, and resigned from Bond at the end of 2015 to concentrate on research and writing. While having a long academic career, Tor Hundloe managed to fit in six years as the Environment Commissioner with the Industry Commission before it became the Productivity Commission. He was Chair of the Wet Tropics Management Authority for six years. In 2003, Tor Hundloe was made a Member of the Order of Australia (AM) for his contributions to environmental economics, fisheries, coastal management, eco-tourism and protected area management. In the same year, he was awarded a Centenary Medal for his contributions to education. In 2010, the United Nations Association of Australia awarded Tor Hundloe the Individual Award for his pioneering work in the environmental field. Sarah Blagrove grew up on a vineyard in McLaren Vale, South Australia, where her backyard was the iconic grape- and wine-growing region famous for its hearty reds. She attended a local college and completed her senior secondary years at Eynesbury College in Adelaide. After receiving a collegiate scholarship she moved to the Gold Coast to attend Bond University, where she graduated in Environmental Science and earned an Award for Excellence from the Australian Council of Environmental Deans and Directors. From an early age Sarah gained a keen appreciation for farm life, riding motorbikes, driving tractors and raising orphaned lambs and poddy calves. She was influenced by her uncles, whose broad-acre farms in the south-east of the state allowed many visits to ‘real’ farms to see the wheat harvest, as well as to acquaint herself with grazing cattle and sheep. Taking a step back further into the family history, her grandfathers on both sides were successful farmers and horticulturists. With McLaren Vale being only a short drive to the coast, Sarah spent many days swimming at the beach over the summer months, with the occasional fishing trip with her dad in his ‘tinny’ to catch crabs and squid. Her family grow shiraz and grenache grapes, including a rare 100-year-old block of dry grown grenache that is of significant history in the area. The grapes are hand-picked and bottled into a special blend each year. Her fondest memories of vintage were being allowed to ride on the back of the harvester in the summer and the smell of ripe, juicy grapes as the bins were filled. During the vintage the whole town would become infused with the sweet/ sour aromas of fermentation as the grapes were crushed. Sarah’s obvious influences in her childhood years, along with her interest in food and health, have shaped her ideals and appreciation of the importance of protecting, preserving and developing food security for a growing world population. Hannah Ditton is an environmental planner with a strong focus on regional planning. The Australian bush, how it is used and what it produces, is never far from her thoughts. This interest can be traced to the influence of her grandparents. One set was from the wool-growing country centred on the western Queensland town of Mitchell, a town associated with the wonderful and, after the rains, bountiful grass that goes by the same name. The other set of grandparents were from Bega, in the dairy country of southern coastal New South Wales. Her grandfather worked for the Bega cheese-maker. As a young high school student at St Peters College in Brisbane, Hannah could not resist enrolling in the ‘Ironbark’ program. Under this educational initiative, students undertake an internship of between five and eight weeks on a farm at Crows Nest, outside Toowoomba. Family history and student excursions in the country have made this young city woman a defender of sustainable agriculture.

vii

List of contributing authors

Curtis Attard is a member of the Australian Defence Force. As the book went to press Curtis was on official duty overseas. Sarah Cantwell is employed to advise students who seek entry to Bond University and has the title of Future Student Officer. Sarah has a Bachelor of Environmental Management degree. Before entering university, Sarah spent time in the American mid-west and saw first-hand the farming that this region is noted for. She delights in listening to her parents talk about growing up on farms. Jacques Chiomey is an environmental manager/scientist. He studied at Bond University. Jacques lives in Darwin and works for a large environmental consultancy company. Juliano de Miranda combines business skills with environmental science. Juliano has a Bachelor’s degree in Foreign Trade and Business Administration from Universidae Paulista, Brazil, and a Bachelor’s degree in Environmental Science from Bond University. Juliano earned an Award for Excellence from the Australian Council of Environmental Deans and Directors. He has considerable experience in the export of bio-fuels from Brazil as well as incountry logistics. Danielle Gallegos is an Associate Professor in the Faculty of Health at the Queensland University of Technology. She is Vice-President of the Dieticians Association of Australia. Daryl McPhee is Associate Professor and Associate Dean Research, Faculty of Society and Design, Bond University. Daryl’s research focuses on fisheries science and coastal ecology. He is author of Fisheries Management in Australia (Federation Press, Annandale, 2008) and the forthcoming Time and Tide: the Environmental History and Ecology of Moreton Bay. Shayal Sharma has a Bachelor of Sustainable Environments and Planning degree, majoring in Environmental Management. She came to develop a strong interest in farming from listening to her father talk about his life as a farmer in Fiji. The major agriculture product in Fiji is sugar-cane but, as with most small-scale farming (by Australian standards), the farmers have milking cows and poultry to provide their own milk and eggs. This is a foreign but fascinating story for a young city-dweller, as Shayal is, to imagine. Alex Solakovic graduated from Bond University with a Bachelor of Environmental Science, majoring in Sustainability. He has concentrated on environmental education since secondary school and is focusing on furthering his studies in the field. viii

List of contributing authors

Amy White is one of the small minority of experts who have blended a very wide range of skills. Amy’s original qualification, gained at the Gatton campus of the University of Queensland, was in environmental management with a focus on eco-tourism. She followed this with a degree in nutritional science at the Queensland University of Technology before researching and writing her doctoral dissertation on life-cycle analysis at Bond University. Amy has worked in her specialist field in Norway. She is now based in Tasmania.

ix

Acknowledgements

All who have contributed to this book, as chapter authors and/or as editors, take this opportunity to express their individual and collective thanks to the large number of farmers who gave up their time to walk us into their paddocks, took us to their grazing cattle and sheep, provided us with delicious fruit for next day’s breakfast, and invited us to partake in the most Australian of all refreshments, a cup of tea from a teapot, with scones, fruit cake or Sao biscuits topped with cheese and tomato and garnished with pepper and salt. Without the help and advice of these folk this book would not have come to be written. It is unusual to acknowledge government agencies; however, two Australian ones play a critical role in gathering, analysing and disseminating data on agriculture (and other subjects). They are the Australian Bureau of Statistics and the Australian Bureau of Agricultural and Resource Economics and Sciences. Their data has been invaluable in preparing the book. Either as a team or individually we covered much country seeking information, insights and the ingredients for an authoritative study of the future of Australian agriculture in a world that has to feed a rapidly growing global population. We went north and south, east and west. On occasions we took along visitors to Australia. Those from America wanted, we suspect, to come away believing Texas had the biggest ranches. What they felt after travelling on gun-barrel straight roads that in the evening sun morphed into mirages, while not seeing a solitary grazing beast, only they can explain. Our visitors were told they were travelling through cattle country and that the stations (translated to ranches) were large, so large that herds of tens of thousands cattle were able to be out of sight. The shrublike mallee and gidgee, or the spinifex country that the visitors saw dominating the landscape, suggested that Australians were not farmers of animals. The country grew shrubs! Yet in other road trips, the hip-high Mitchell grass suggested otherwise; maybe the worldclass merinos were dwarfed by the grass. This is a perspective not gained sitting in front of a computer in a city office. We do single out a special thanks to a banana-farming family from the Tully–Mission Beach area. There is no chapter on bananas as such in our book for them to read. They are not alone in having their type of farming unreported. In an agricultural country as diverse in its production as Australia, many forms of farming could not fit into a single volume. These farmers are Steve Lowe and his partner Cath McNamara. For many years, they have welcomed and educated university students who have visited their banana plantation on the Tully River. This has been truly special hospitality. Without the encouragement, advice, editorial and otherwise various forms of help by the excellent publishing team at CSIRO Publishing, this book would not have been written and melded into the form it takes. Dr Julia Stuthe liked what was put to her at the early stage of planning the book and, having taken our project on board, we were guided through x

Acknowledgements

the process by Lauren Webb, our Development Editor, Tracey Millen, our Editorial Manager, and Melinda Chandler, our Marketing Communications Manager. Their efforts and advice hit the spot. The detailed editorial efforts of Elaine Cochrane led to significant improvements to the book. Occasionally modern communication technology got the better of the senior (meaning ‘oldish’ in his case) editor, and he called on Stephen Skinner to exercise his excellent computing skills to permit progress to be made. Regardless of all the advice and assistance given, if any omissions or errors remain they are of our doing, or lack of doing.

xi

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Introduction and a mud map T. Hundloe

A lucky land! Australians can feed on an enormous variety of foods grown in their own country. The foods are as fresh as the next truckload from the local farm, because that is what they are. Our favourites such as bananas we can buy every day of the year. We can put a locally caught prawn on the barbie on each of those 365 days. And we have enough surplus food to feed two-and-a-half times our population. The earnings from our farm exports help put Australia second (out of ~200) in the world in terms of an index based on income, education and length of life (the Human Development Index). However, let us not overstate our agricultural abilities, at least not until we have gathered the data and put it to test of scientific scrutiny. This brings us to the question of what this book is about. It seeks to bring a degree of realism to the much-touted assertion that Australia will become the ‘food bowl’ of Asia. Undoubtedly Australia, with its ‘clean green’ image, will continue to be an important exporter of farmed products as global demand for food increases, but there are serious biophysical, economic, institutional and social constraints on our ability to produce a greatly increased quantity of food for export. The questions that arise once we contemplate our future as a serious player in world food supply are many and varied. To what extent will Australian farmers play a role in meeting the increased demand for food? Which overseas markets will be dominant? What products will be in high demand? What are the constraints on our farmers? Are the supreme optimists ‘on the money’ with visions of opening up the north of Australia to intensive agriculture? Are the infrastructure costs too high to warrant more large dams and irrigation schemes? What of the negative impacts of increased agricultural activity on other industries and the environment, including other export-earning industries such as eco-tourism based on the Great Barrier Reef, if the pollutants from farming are not managed better? What technological advances, in terms of making farming more cost-efficient and greener and cleaner, are on the horizon? What can we do to reduce wastage of farmed products? How do we seek to understand and respond to the changes in consumers’ preferences in food? Throughout this book, key messages will be: don’t count on a constant rate of growth in demand for agricultural products, and don’t believe that our ability to supply these products is not severely constrained. A conservative ‘risk averse’ approach to the future is sensible. 1

2

Australia’s Role in Feeding the World

This is an unusual book for the times. Most books dealing with natural resources tend to focus on the harm we are doing to them: polluting waterways, releasing ever-increasing amounts of carbon dioxide into the atmosphere, running down our stocks of minerals. Put the emphasis on humans living in cities and most books tend to focus on pollution (again), traffic congestion, slums (if in the poorer parts of the planet), waste disposal and water provision. What a focus on living in urban environments, clean or unclean, overlooks is that cities only exist because humans invented farming; surplus food allowed a wide range of new economic classes to form (merchants, accountants and bureaucrats) and enabled these people to form villages near but separate from the farms. Today, more than ever, cities only remain viable because of agriculture. If we diminish our ability to grow food, our cities will shrink. Many city dwellers would be forced back to ‘the land’ in an attempt once again to grow enough food to feed themselves. That in itself might not be a bad thing where productive rural lifestyles are feasible. What would be a human disaster would be to fail to feed on an adequate basis a global population that will have increased by more than two billion in not much more than a generation’s time. The remainder of this chapter is a mud (road) map of what follows. The book is divided into sections. Section 1, The big picture, deals with Australia’s role in as a major farming nation, able to export much of what it produces. Chapters 1–5 cover the gamut of matters that pertain to that role. In Chapter 1 we go to the question of the extent of global demand for food. Why are politicians, farmers, scientists and environmentalists talking about ‘feeding the world’? The most obvious reason is that there is recognition that the global population is growing, and rather rapidly. The well-researched and commonly quoted increase is in the order of over two billion on top of the more than seven billion alive today. It is natural to ponder how these extra humans are to be fed. If one is an Australian farmer, there is a good reason to focus on feeding, if not the whole world, at least some of it. We produce significant surpluses of many farmed products and send large quantities of grains, meat, seafood, wool and cotton overseas, much to Asia. And, of course, we all know that China is becoming rich rapidly and is taking to the quality foods we can supply. Diets are changing in China and in the better-off populations of other developing countries. This is to our advantage. Our farmers have an incentive to increase yields (to the extent that this is feasible) and benefit from increased exports. Feeding the expanding middle class in the poorer countries is not addressing the larger issue of food poverty in the world, but our famers can play a worthwhile, small part in the scheme of things. In Chapter 2 we expand on the demand side, while remaining focused at the global scale. We select various countries to illustrate key points. Income elasticities are not the only measures we need to calculate and respond to. Substitution of foods as consumers become richer (red meats for white meats) or what economists term ‘cross elasticity of demand’ is something we will need to keep an eye on. In Chapter 3 we turn attention to the supply side. Australian farmers won’t be the only ones to play a role in helping to feed an enlarged and richer human population. Not only will we compete with our traditional rivals, there are nations where farm yields are presently low but capable of significant improvement. They could become competitors. There are regions of the world where large areas of land are available for cultivation and likely to be opened up if prices increase sufficiently for farmed products, and if institutional and infrastructure hurdles in these countries are addressed successfully. The challenge for the future if we are set on increasing agriculture involves a choice: open up virgin and/or

Introduction and a mud map

lightly grazed land for cultivation, or find ways of obtaining greater yields from existing farmed land. We now come to Chapter 4, which focuses in broad terms on Australia’s opportunities and challenges. Australia’s population is predicted to grow strongly to be in the order of 35 million by 2050. If there is no increase in agricultural production in the country, this would leave a much smaller surplus available for export. However, the Australian farming community is not likely to be satisfied with its present level of production. For some time now eyes have been turned to the opportunities that a rapidly developing China provides. Australian farmers are optimistic that they can produce and sell more. Chapter 5 expands on the matter of international trade. Notwithstanding that we live in a so-called ‘globalised’ world, much is not easily moved between countries. Money (financial capital) flows freely. What is of importance today are the trade rules that apply globally (that is multilaterally), regionally and bilaterally between trading partners. Other than international negotiations on addressing climate, there is nothing more complex and convoluted than bringing farm produce into a genuine free global market. These five chapters set the scene for a detailed investigation that follows and the formulation of a blueprint at the end of the book. Section 2, Biophysical limitations, focuses on the biophysical limitations on Australia’s agriculture and fisheries. A lucky land, we have called it. However, with the good luck of having virtually all possible climatic zones and associated environments from tropical rainforests to alpine snow fields comes the back luck of being an ancient continent with a flat landscape and poor soils over much of the continent. For such a large country, much of it is dry, deserts, in fact ten deserts. So far Australians have made their luck by keeping the human population low. If we had 60 million people, a very small number for a nation the size of Australia, the best we could do at our present level of agricultural output is feed ourselves. There would be no surplus to export and earn foreign exchange. We would be a very poor country by world standards, a subsistence economy with nothing much to trade.1 It is one thing to become aware of the need to expand farm production; it is a significantly different matter to get nature to come to the party. We have to work with nature, not against it, yet for much of European history in Australia, we have done the latter. This has come with an environmental and, often, economic cost. As we write, we are still learning how to farm in this ancient island continent of droughts and floods; we should add fires as the third natural attribute of the nation. Chapter 6 is the first in this section of the book. Curtis Attard discusses climate and rainfall patterns before turning attention to how Australia farmers harvest and use water. The multi-purpose river diversion and water storage Snowy Mountains Scheme serves the nation well with both hydro-electricity and a vast irrigated area, but to be realistic it would not have got approval in the 21st century. Management of the Murray–Darling system is fraught with disputes over water rights. The most famous dam after the Snowy Mountains Scheme is the dam on the Ord River and numerous cost–benefit analyses suggest the Ord River Scheme was a very significant net cost to the Australian taxpayers. In no case has its annual revenue been greater than its costs. What Australia missed out on in terms of large rivers it makes up for in having an enormous supply of artesian water. Where successful bores have been drilled and the bore drains run non-stop, sheep and cattle can survive in the most miserable country. Chapter 7 is about the soils of Australia; soils, water and climate combine to determine Australia’s future as an agricultural country. The country’s soils are old, shallow and often

3

4

Australia’s Role in Feeding the World

nutrient-poor. There are also areas, large by northern European standards, small by Australian ones, that contain excellent ‘black soils’. We discuss the negative impacts of cultivation if undertaken inappropriately. These impacts include the loss of soils via water and wind erosion, particularly where land is left bare between the sowings of crops or where overgrazing occurs. Then there are the problems of over-irrigation, waterlogging and salinisation. Less obvious but just as critical in terms of sustainability is the fact that plants harvested remove the elements from the soils that these plants used in their growth. We can consider this to be a form of mining the soil. Soil replenishment is required once yields fall. Soils rebuild at an incredibly slow pace, the rate of replenishment dependent on the base material and the weather patterns that play on it. We need to understand soil. Chapter 8 describes Australia’s major fisheries on a state-by-state basis. These range from the species-rich, but production-limited, tropics to the cold-water fisheries with few species but large numbers of the individual species. Water temperature, sunlight, water depth, nutrient up-welling and major climatic shifts are to fisheries what soils, rainfall and sunlight are to terrestrial farmers. To complement wild harvests, farmed seafoods and aquaculture are discussed. Having dealt with the fundamental biophysical characteristics of the nation, ones that will have a determining impact on our ability to increase food output, we turn our attention in Section 3, Human and political dimensions, to the human, technical and political dimensions of modern agriculture in Australia, and in particular to how these factors could impinge on efforts to increase production. In Chapter 9 our focus is the protection of farm land. Farm land is under threat from spreading cities and, in some locations, mining. On these issues economics and economic power play crucial roles. Disputes are inevitable. In our seas, our fisheries are not under immediate threat although concern about land-based pollution and conflict between recreational and commercial fisheries is never far from the surface. In Chapter 10 we delve into the pros and cons of genetically modified (GM) farmed products. The conventional terminology is ‘genetically modified organisms’ (GMOs). This is one of the most controversial issues we deal with. The benefits and costs of GMOs are contested on various grounds: the GMO companies’ control of farming, environmental spill-overs and philosophical perspectives relating to ‘authenticity’ are on the debit side, while on the credit side is the potential to expand production and feed more of the planet’s hungry. In Chapter 11 we discuss the very large quantity of food that is wasted, starting on the farm and moving through the chain to the ultimate consumers. Rather than dealing with this matter on an aggregate scale, we focus on one of Australia’s better known industries, growing bananas. This study is the most detailed piece of research to date in Australia on farm waste and its related costs in terms of nutrition lost, greenhouse gases generated and economic costs. Who is to blame if food is not aesthetically pleasing, if a banana is too bent? We might not answer this question in this book, but it cannot go unanswered if food waste is to be addressed. In Section 4, Australia’s agricultural export products, we explore the major types of agriculture in Australia, more precisely the products that are farmed and are likely to experience stronger demand, both in domestic sales and in Australia’s major overseas markets. Most attention is given to the more significant grain and horticultural crops, but nonfood agriculture is included in chapters on wool and cotton. This makes sense even though our focus is on feeding people. Wool and sheep meat are ultimately joint products, and cotton is a major competitor for land and water in Australia’s rural economy, as well as

Introduction and a mud map

supplying cotton seed, a by-product of processing, to be fed to cattle and having other uses. Also included is a chapter on the utilisation of agricultural land to provide ‘green energy’ as a supplement to farming. Chapter 12 is the first of our product chapters. Its subject matter is grain farming. While the major grains are covered, pride of place goes to wheat and rightly so, as wheat and beef compete for number one position on Australia’s league table of farmed products. Not only is wheat a major cereal in the domestic diet (the conventional Australian lunch is a sandwich, and toasted bread is for many a necessary complement to a bowl of cereal or eggs and bacon at breakfast), it is a very important export item. Sarah Blagrove, author of this chapter on grains, discusses a variety of other grain crops; barley and sorghum get special mention. In Chapter 13 the topic is the beef industry. It was tempting to cover all our major livestock in this chapter, not just beef but also lamb, mutton, pork and poultry, but there are reasons to concentrate on beef. Chapter 16 does focus on poultry and Chapter 17 on eggs. In the case of sheep meat its proportion of the global demand for meat is small, presently at 5%, and expected to be 4% by 2030. Sheep meat is dealt with in Chapter 20, Wool, lamb and mutton. As Australia is not a major pork producer and is not likely to become one, we omit this meat. Beef goes head-to-head with wheat as Australia’s number one agricultural industry. Where it clearly dominates is in the amount of land it occupies, in the order of 200 000 million ha. The beef industry is not all open-space grazing. Today there is considerable use made of improved pastures (sown with new grasses and fertilised) and feedlots to fatten cattle before sale. The modified pastures are in the higher rainfall and better soil country. Feedlots tend to be sited close to abattoirs and not too distant from ports. Chapter 14 covers a lot of territory, both in geographic terms and in terms of the farmed products discussed. Its focus is Australian horticulture. Horticulture includes fruit, vegetables, nuts, flowers and nursery products. In as much as our interest is food, only the first three are discussed and even then most attention is given to fruits as they, at present at least, provide the best opportunity for expanding exports. That is not to diminish the importance of what was a unique Australian product until the Hawaiian farmers got hold of some cultivars, Queensland nuts (otherwise known as macadamia). Return from a visit to the US mainland and stopover in Hawaii. At the international airport in Honolulu chocolate-coated macadamias are the gift on display, offering to be purchased and presented to your family and friends back home in Australia. Many tropical Australian backyards featured a macadamia tree until a generation ago. Harvest your own at Christmas time. Crack them and, if mixed with chocolate is your preference, dip the kernel in heated chocolate. Eat when cool. Chapter 15 takes us into sugar-cane country. Australia is a major player in the export of raw sugar. Brazil is the dominant sugar producer in the world, at approximately one-quarter of the annual global total of 180 million tonnes. Growing very close to the Great Barrier Reef, dependent on significant amounts of fertilisers and pesticides that are readily drained into creeks and rivers entering the Great Barrier Reef, sugar-cane growing has become of considerable concern for those charged with maintaining the ecological health of this World Heritage region. The sloshing of a variety of chemicals into the Great Barrier Reef lagoon is the most critical environmental issue facing Australian agriculture. In Chapter 16 we deal with the poultry (or chicken) industry in Australia. In the global context it is a small industry, but it is able to supply the domestic market and sell very small amounts overseas. What is special about chicken consumption, globally and in the

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domestic market, is its very strong growth. In the rich countries, chicken meat has gone from a luxury item – the Christmas Day special meal – to the least expensive meat. Economies of scale have made all the difference. Both relative price and the promotion of white meat as healthier than red meat have driven demand, and to meet increased demand chicken farms have grown in size, further reducing price. It seems right that a chapter on egg production follows a chapter on chicken meat. So we come to Chapter 17. Many an egg is eaten at breakfast. When we think of eggs it is usually in terms of how they are prepared – fried, boiled, scrambled or served as an omelette – for the morning meal. However, considerable use is made of eggs in cake-making, and the ingredients egg powder and egg pulp are not to be overlooked. Australia imports more of these processed egg products than it exports. There should be scope for import substitution. In Chapter 18 we go back to the sea again. We briefly deal with the history of fishing in Australia, then come to the present day and our exports. Seafood is one item where imports challenge exports. Australians import well over half of the seafood they consume, and local fishers compete with cheap imported product. Looking to the future, again the seafood story is different from that of other foodstuffs. Demand for seafood will continue to expand in Australia, and at the same time overseas demand (the Chinese middle class again) will grow. Given our limited and basically fully exploited wild-catch fisheries, there is little scope other than large-scale aquaculture to meet increased demand. Seafood prices are bound to increase while demand knocks up against inelastic supply. In Chapter 19 we deal with two more high profile Australian exports, milk and milk products. The Australian dairy industry has undergone dramatic change, with the small farms (running under 100 head) giving way to the much larger ones (of 500 head or more). Economies of scale are evident. While remaining family-owned, large farms employ managers and workers, making dairy-farming a business rather than the lifestyle it was from its inception. Recently robotic milking sheds have been introduced on some dairy farms, reducing the cost of labour. There is talk of large-scale, barn-based farming. And the Chinese are buying farms. Australian milk-based products are destined to become a major export success story. Chapter 20 takes wool growing, lamb and mutton production as its topic. Australia has a vast herd of sheep today, even if much reduced from its heyday. The nation’s merino wool is still the best fine wool in the world, and its lamb is on par with its New Zealand counterpart. While sheep meat is not predicted to experience the dramatic rise in demand of beef, it will remain an important food both in the domestic economy and as an export item. In Chapter 21 we tell the story of cotton. Growing cotton in Australia competes with food crops and grazing for land and water. It is an industry with a fascinating local history. During the American Civil War, with the blockade of the southern ports from which cotton was sent to the English and Scottish mills, mill-owners searched for alternative supplies. Cotton was grown during this period near what became Surfers Paradise on the Gold Coast. It failed. Today Australia ranks number four in the world in cotton exports. It is now grown on western plains on a scale that brings great economies. Some is rain-fed, but some is dependent on vast quantities of dammed water. Chapter 22 is a case study of an agricultural region, rather than focusing on a product. The Atherton Tableland is a unique landscape, having magnificent World Heritage listed rainforests interspersed with some of the most productive farming land in Australia. It sits in direct contrast to the dry, desolate grazing land that comprises most of the Australian continent. On the Tableland, a farmer can wave to his/her neighbours. You might be

Introduction and a mud map

running cattle; they are growing tropical fruits. In contrast, in the ‘Outback’ Australia, one can drive for hours to reach your neighbour’s homestead. We come to the penultimate chapter, Chapter 23. In a book on agriculture one could wonder why devote a chapter that talks about ‘farming’ the sun and the wind. We do describe a group of wind turbines in the countryside as a ‘wind farm’, and likewise a cluster of solar panels (also in the countryside) as a ‘solar farm’. The former are becoming popular in the southern parts of Australia, particularly along the coastal region subject to the ‘Roaring Forties’. It is not unusual to see cattle grazing under wind turbines. Rural solar farms will come about. As we write there are a small number of proposals in the approval stage. These cover land and deny other uses of it. The economic decision will be the opportunity cost of covering grazing land with paddocks of panels. One expects only poor quality land, in close proximity to feed-in power stations or sub-stations, to be attractive for solar farms. Section 5, Towards a sustainable future, concludes in providing a blueprint for Australia’s role in feeding an increasing global population.

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SECTION 1 THE BIG PICTURE

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Feeding the planet’s growing population T. Hundloe

Introduction Sit back and hope for the best as Charles Dickens’ Wilkins Micawber would have us do, and Malthus will haunt the globe in a generation’s time.2 The Rev. Thomas Malthus (see Box 1.1) had a major influence on Charles Darwin, who in the 1830s read the former’s book on doom and gloom, and in particular human population collapses through starvation. The fight for available food by the same species, rather than each animal species playing predator–prey in the jungle, was a fundamental insight contributing to Darwin’s development of the theory of evolution. The survival of the fittest was both intra- and inter-species. Humans were not excluded. A population with more people than could be fed would face dire consequences, not only for the starving but also for those seeking to safeguard their food sources. As we race from a world human population of ~7.3 billion to in the order of 9.73 billion in 2050, we must ask: how are we to feed these extra mouths? The Malthusian question is: does the planet have the resources and have we the intelligence to ensure that this number of people can be fed, clothed and housed? Of course, we must try. But that is not the answer. An immediate halt to population growth is not possible, as at the moment there are simply too many young people in countries where large families are the norm and who will go on to produce offspring. This demographic imperative means there will be no significant slow-down in the growth of human numbers at least until 2050, maybe even further into the future. So we are obliged to attempt to feed the vastly increased numbers. What will be the role of various countries? There are countries that at present are relatively efficient agricultural producers and major exporters. The United States, Canada, Australia and Brazil come to mind, although production capabilities in Brazil are less advanced. Can these countries up the ante? There are also countries with significant areas of potential farm land, for example South America. Then there are countries like Russia and some of the other ex-Soviet nations where agricultural production has declined from its level of the Soviet era, waiting for the establishment of the right institutional settings to reinvigorate it. In 2011 in Russia, the decline in area sown was 35%, equal to the total sown area of Germany, France and Spain, and the number of cattle had decreased by 65% (Schierhorn et al. 2014). There is immense potential for agricultural development in Sub-Saharan Africa, but a question 11

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Box 1.1: Rev. T. R. Malthus Malthus published An Essay on the Principle of Population as it Affects the Future Improvement of Society (the short title) in 1798. His key message was that the human population grows exponentially, while food supply grows in a linear fashion. Malthus was a statistician, geographer and economist. He was misunderstood in his day by progressive thinkers. However, his view was no more radical than that of that famous economist Adam Smith, who predated Malthus in pointing out the link between food output and human population growth. Malthus was a friend of David Ricardo, who did not disagree with him on the need to manage population growth. Malthus had a fundamental influence on Charles Darwin and Alfred Russel Wallace in their development of the theory of evolution and an enormous influence on the liberal economists John Stuart Mill and John Maynard Keynes. Keynes ranked Malthus with the great economists. Ironically for Malthus’ pillorying by Marxists, China’s one-child policy was pure Malthus.

mark hangs over the likelihood of that potential being realised. As Meredith (2014) relates, a religious divide between the mainly Muslim north and the Christian-animist south, tribal animosities, greed and corruption, lack of financial resources and an ability to borrow severely hinders development, in particular the building of the infrastructure required of modern agricultural enterprises. Renowned economist Jacques Attali, in his prediction of the future in a book appropriately titled A Brief History of the Future (2009, p. 117) comes to similar conclusions: ‘the African continent will… fail to become an economic player of global importance’. He argues that by 2025 Africa will be only able to feed 40 per cent of is expanding population. Forget feeding the world if you can’t feed yourself. On the other hand, recommencement of agriculture in the presently derelict Russian fields awaits the appropriate financial incentives. Sooner or later, the Russians will do the sums on the rapidly increasing middle-class population in east and south-east Asia and take advantage of the opportunities. Our own country, ‘clean, green’ Australia, is a superpower agricultural producer at the moment, but there are serious queries about our scope to increase production sufficiently to be a major player in meeting the increased global demand for food. Undoubtedly we will be a minor player. Where between minor and major will we sit? This is what this book is about. The book strips back the rhetoric that asserts that Australia will be the ‘food bowl of Asia’, that we have vastly undeveloped agricultural potential if only we build a few more mega-dams and irrigate vast tracts of land. Australia has a key role to play, but not necessarily according to the wisdom of those who promote the cultivation of land where the rainfall is unreliable and the soils deficient. We will come to where our potential is, as well as point to the obvious pitfalls that lie in wait if we become over-confident in our agricultural abilities. A mildly conservative realism is our stance.

Feeding everyone The starting point has to be a focus on global demand for food and global agricultural resources, most importantly soils and rainfall (water availability more generally), and the local and international transport and storage infrastructure that is required to move huge

1 – Feeding the planet’s growing population

amounts of foodstuffs from where they are grown to where they are consumed. Just under one billion people suffer from severe hunger as we write. Add a further 2.4 billion needing to be fed by 2050 without increasing the food supply, and do your own arithmetic. Domestic and international trade rules can both help and hinder the expansion of agriculture, particularly in the poor world. These are matters the global agricultural exporters (and importers) can work to progress through the World Trade Organization – still stuck in the Doha Round! Even if we solved these issues there is something more basic, more challenging and without an easy answer. It is the lack of money of the poor of the world. One gets to eat no more than one can pay for. It is not widely appreciated that the starving in the world today could be adequately fed if they had the money to purchase food. The planet produces enough food at a global scale to feed all at more than a subsistence level. Starvation and malnutrition are the results of inequality. Or, if you like, inequality is the cause of the dramatically reduced life spans of the poor, under 50 years in the povertystricken world, compared to the mid 80s in the wealthy countries. This equates to 30 years of lost life due to starvation, malnutrition, disease and failed governance. As the eminent 19th century economist John Stuart Mill argued, efficiency in production, a matter of sound economic performance, is one thing, but it has to be treated separately from an economics of distribution of the goods and services, including food, that are produced. This Australian farmers cannot fix. Of all the experts, economists should be best equipped to work to make headway towards the welfare of all the planet’s citizens, not just the rich who have the financial capability to eat well – and in some cases, too much. The planet’s farmers obviously will increase the supply of food, but whether the increase is enough and sustainable are matters we will shed light on, if not answer conclusively. Certain inefficiencies in farming, the over-use of water being one, are relatively easy to measure, document and fix. However, it will be necessary to be able to point to combined economic and environmental benefits of farming using minimal water before notice is taken. From a farmer’s perspective, the economic benefits will have to be made obvious. Where water is provided free to farmers or heavily subsidised by taxpayers, we cannot expect wise use of water. This remains the case in certain areas of Australia. Of course, water extracted from ever-flowing coastal streams could remain without charge in the future, particularly if the farmers pay for their extraction and ensure the water returned to the environment is free of residual fertilisers, pesticides and other pollutants. Other reasons for inefficiencies, such as food wasted on the farm, in transport and at the wholesale/retail end, are also easy to measure and report on, but it is not obvious how to change the situation, particularly where the focus is on the consumer. The behaviour of rich consumers who can discard food without thought is not going to be easy to change. It is difficult to think of an economic disincentive (a ‘waste tax’ on the uneaten component of a restaurant meal) that would have public support, let alone be practical. Yet something has to be done to reduce the waste of food. It is not only the waste of food itself, but also waste of non-renewable fuels and fertilisers, as well as the labour and land that are used in farming the food that no one gets to eat, that needs to be recognised. Food would be much cheaper if the farmers could sell all that they grew rather than consigning large amounts to the waste bin because retailers believe consumers want, for example, perfectly round oranges, a fruit that nature has decided should not be round. The case of waste we illustrate in a novel case study (see Chapter 10). The United Nations Food and Agriculture Organization (FAO) has done the sums on feeding the world. The global demand for food in 2050 (or, rather, ‘need’, so as not to

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confuse this with the economists’ concept of ‘effective demand’ where people have the ability, otherwise money, to purchase food to meet their needs) will increase by ~70%. A greater increase is required in grain production, which sits at present at a staggering 2.5 billion tonnes. The FAO says double this amount of grains will be needed. Grain feeds humans not only directly but also indirectly through grain-fed animals. Much grain is grown to be fed to cattle and other livestock because humans in general are omnivores, eating as high as possible up the food chain. This would seem to be the dietary preference of most. Vegetarians are likely to believe that it should be easy to convert meat-eaters. Health. Ethics. Saving the planet. Dietary habits suggest otherwise, and the preferences of the growing middle class in the developing countries indicate it is not just time-worn tastes but a human trait to seek a great variety of foods, and to feed as omnivores. In the very long term, if the price of land and fertilisers increase dramatically, it is possible that the high price of eating at the top of the food chain will change the dietary preferences of all but the wealthy. We will be forced into eating lower down the food chain. Today, the vast bulk of vegetarians are so simply because they cannot afford meat. If, and when, these people become wealthier, they will seek out various meats. Feeding the world is a moving target. The richer one is the more meat one eats. At a high income level, for example that of middle-class Australia, meat consumption plateaus. There are parts of the world where populations are large already and continue to grow rapidly, such as Sub-Saharan Africa, and where much farming is very small-scale and basically subsistence-based. Sub-Saharan Africa is a resource-rich region with water available in abundance if large-scale farming were to be attempted. Consider the Congo (Zaire) River. In terms of water discharge, it is second only to the Amazon. It winds through 10 countries, and if several dams were built (two exist) it has the potential to provide hydro-electric power for the whole of Sub-Saharan Africa plus much water for irrigated agriculture. However, the biological diversity values of the rainforests in the Congo River Basin suggest the need for considerable caution. So do existing land uses and customs. In Sub-Saharan Africa there is a large variety of ecosystems, from dense rainforests to the extensive savannahs (valuable to local people in their capacity as cattle herders), to land available for village gardeners. Massive changes in farming culture, let alone agreements among the mosaic of tiny and large countries that are Sub-Saharan Africa, would be needed if this part of the world were to develop agriculture along the lines of the industrialised countries. Some suggest that this, the 21st, is ‘Africa’s century’. However, as already pointed out, various matters stand in the way of this: political and religious tensions (often leading to war), corruption, ineffective institutions of governance, tribal land ownership, inadequate transport infrastructure, and lack of financial capital. Because of these constraints, and no realistic model on which to base forecasts, this region’s future is unknown and unknowable. Of course, this need not stop one from guessing. It is possible that large amounts of foreign investment in both agriculture and related infrastructure will bring the economies of scale that will allow Sub-Saharan Africa develop its own self-sufficient food supply and, following that, produce a surplus to sell in foreign markets. How investors could justify this is not obvious, as Jacques Attali’s gloomy prediction of 2009 suggests. It is just as likely that rich nations with excess financial capital and concerned for their own food security will invest in Sub-Saharan Africa with the aim of developing large farms to produce exports to the investing country. At present coffee, cotton, flowers and tobacco are obvious examples. In this case no more than ‘trickle down’ benefits go to the local populations.

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This is an element of the ‘dependency theory’ advanced by various economists – the idea being that the wealth of the rich countries is dependent on the poverty of the poor.

Getting rich and changing diets As people become richer they tend to expand their diet. When people are poor, rice garnished with vegetable or shrimp sauce, potatoes and turnips or breads and spreads suffice. Economic advancement sees these staples replaced by red meats, dairy products and expensive wild-caught seafood. Economists describe the change from one product to another as a shift in ‘tastes’, meaning something like a change in food fashion. Nutritionists talk of ‘dietary transitions’. Fortunately the practitioners of both disciplines understand each other’s jargon. We can be excused for feeling a sense of bewilderment at what our fellow humans do. Western visitors to Asia who delight in a variety of exquisite tastes of local foods can but scratch their heads when witnessing local folk chewing on a McDonald’s burger. There are examples from around the world where locals remain loyal to their own cuisine and ‘slow food’ culture, where the taking of meals is much more than replenishing energy. Eating a meal with family and friends is a social event in many cultures. However, despite an obsession with television cooking programs, the too busy, middle-class family, wherever in the world it is found, has turned eating into something less enjoyable. It can be much worse for the very poor: eating is akin to stoking the coals in a steam engine so work can continue. We live in different worlds.

A paradox Let us consider what becoming middle class and having middle-class food tastes means. In general terms, more is demanded of the planet, and the environmental costs increase. The environmental costs of a middle-class life style (as lived, say, in Australia, Japan or France) are likely to be high, but this is not necessarily obvious. That they are too high, I am willing to admit, is more an educated guess than a demonstrated fact. However, the preliminary evidence from a variety of research projects and modelling studies that attempt to estimate the global carrying capacity at a middle-class level of consumption suggest that we are already looking for another planet with the same life-support characteristics of planet Earth to provide us with food, shelter, clothes, electricity and transport, and deal with our wastes. The original research into ecological carrying capacities was the ‘ecological footprinting’ undertaken by Mathis Wackernagel and William Rees (1996). Since then the Global Footprint Network has continued this line of research and published numerous reports pointing to an overshoot in the global carrying capacity. With our existing global population and relatively small middle class, there is a widely quoted estimate that we have already overshot the world’s carrying capacity by 40%. Others suggest several more planet Earths are going to be needed this century. While we must be aware of a serious, looming overshoot, it is best that we note that our science is too rudimentary at present to make accurate assessments on this matter. Allow me to come to the paradox. It is only when a middle-class lifestyle is achieved that population growth drops to zero; that is, replacement level. China, with its long-running one-child policy, is the exception. In that case the government provided the necessary disincentives for large families. Does the paradox mean that we cannot realistically halt our assault on the environment, as the inevitable consequence of feeding, clothing, providing shelter and transport for the growing human population, until all across the globe

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achieve a middle-class lifestyle? If that is the case, we are forced to work towards, by whatever means feasible, production to cater for 9.7 billion people (or 10 billion people, maybe even 12 billion if population growth does not slow as we are presently predicting). And many of these people will, eventually, be middle class, with demands on resources equivalent to ours. This poses the question: will it be possible to feed a population approaching 9.7 billion at middle-class levels of consumption? That is, we are not seeking to feed the increased human population of 2.4 billion at a subsistence level equivalent to what the poor are fed today, but at a level the middle class are fed. This will entail an enormous increase in red meats, poultry, pork and seafood, plus dairy products and the vast array of manufactured products that are primarily based on cereals, oils, fats, sugars, fruits, vegetables, eggs and meats. There does not exist a reliable estimate of the extent of agricultural production required to feed nine-plus billion middle-class people. The FAO estimates mentioned throughout this book are the best we have to work with at a global scale. When we come to Australia’s potential contribution, particularly in helping feed the middle class of Asia, we are on somewhat surer ground. But even then we are forced to extrapolate from recent trends or draw on our experience in supplying the Japanese, Korean, Singaporean and Hong Kong consumers as they became wealthier. We expect Chinese consumers and others to follow suit. There is evidence to suggest that our assumptions on this matter are warranted. At the global scale, we can readily estimate the total calories required for an adequate diet, but that tells us virtually nothing about the types of food that will be in demand in 2050. How much more red meat will be in demand? What about dairy products? Will grains and tubers remain the mainstay of the poor? Estimating the quantity of calories required tells us nothing about the cost of providing those calories, the time-frame involved in accelerating their production and whether we can do so on a sustainable basis. We do no better than make crude estimates. We have not much more than a generation to find far more precise answers than what our best guesses today suggest.

Too rich by far Should we not build into to our estimate of the additional food required to meet the greatly increased global population the waste of food that has become commonplace in middleclass societies? That is, will the global middle class in 2050 waste as much food per person as today’s much smaller middle class? Some estimates put the present wastage at half of all food produced. The middle class today might give little thought to this. They could think it is not their (our) concern how the rest of the world feeds itself. If we pay for food and waste what we pay for, that is our business. That the wasted food could have saved countless lives as well as extending the life spans of the poor does not register. How do we change attitudes on this issue? The starving do not face the problem of waste! To them the concept is meaningless. During the Second World War when rationing was in place in Australia and many other countries, the concept of waste was meaningless. Today, too rich by far! Tomorrow, too many mouths to feed!

The challenge ahead Notwithstanding the fact that the middle class, wherever it is found, is involved in considerable wasteful (frequently conspicuous) consumption, there is a ‘universal model’ of human aspirations as Munz and Reiterer (2009, p. 269) point out. These two demographers, with expertise in economics and resource use, argue that it will not be possible to meet the aspirations of the poor if the human population reaches nine-plus billion. They

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provide the following example of the challenge ahead: ‘if all people would claim the amount of meat consumed per capita in a highly developed world, we would have to quadruple the size of the already fairly extensive animal farming industry’ (p. 270). We can contemplate significant increases in livestock production, but a four-fold increase, given that it will need to be fed on cultivated grains, is not a matter explored in agricultural science textbooks. What amount of grains, irrigation water, fertilisers and land-clearing would be needed? We cannot provide a definitive answer, yet. Considerably more data is needed. However, we can suggest an alternative approach and that is to change the lifestyles and the consumption of resources by the planet’s middle class. A big ask indeed! Significant price increases for everyday foodstuffs will help. Natural resource limits will have the effect of increasing prices. And, of course, significant price increases will hurt the poor more than anyone else. Therefore, we continue our search for an equitable solution. As should already be evident, there is considerable complexity involved in the tasks that face us as we look forward to the year 2050. While there are some knowns, including those listed immediately above, there are many more unknowns. Some of these have been recorded above, and we will attempt to tease these out so that they become knowns. It is uncontroversial to suggest that income is a key driver in changing preferences in consumption of foods. It is also reasonably clear that consumption patterns change when people move from rural areas to cities, more so in some countries than others. With few exceptions, urban dwelling does not come with self-sufficient home gardens, while rural people, especially if they are farmers, produce much/most/all of their sustenance on farm. On the other hand, city people purchase considerable amounts of processed foods. This is evident even in the poorest of countries, where imported canned foods (some of dubious quality) are purchased while local fresh foods are neglected. There are both sociological and economic reasons for this. First, poor people aspire to be like the rich, which means that they feel wealthier if they can purchase a tin of canned fish rather than catch a fish. Second, it can be less expensive to purchase a can of fish than to spend money on boat fuel to seek wild fish to harvest. In this example, I am referring to South Pacific communities. It is a reasonable hypothesis that there is much more food wasted in urban living than in rural lifestyles. Here we are not thinking of the waste on the farm or in transport and storage, but waste in the home or the café/restaurant where city folk eat. Attitudes to food differ. One suspects that farmers have an appreciation of the labour and money invested in producing food, something that escapes the mind of the city-dweller. Does not milk come from a bottle, meat from a cellophane-wrapped package, with no land or animal involved, and fruit from cans! The notion of food discarded on the farm or perishing in transport, let alone involving tractors, harvesters, fertilisers, irrigation and manual work, does not enter the city consumer’s mind.

Where the needs will be the greatest The basic driver of aggregate demand for food is population growth. Growth rates are uneven across the world, and are predicted to remain so for some considerable time. The difference is between the developed (industrialised) countries and the ‘less’ developed plus ‘least’ developed countries. The average annual rate of growth in population in recent years for the developed countries was 0.3%; for the less developed countries it was 1.4%; and for the least developed it was 2.4% (Munz and Reiterer 2009). For the Australian food exporter, the question is: what countries and regions will experience the greatest population growth and will they become ‘middle class’ societies

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with the means to purchase what we grow? This is where the economists’ measure of consumers’ responses to changes in income become very important. The measure is called ‘income elasticity’, where elasticity suggests being pulled by income to buy more in general, and to buy more of certain goods. People in low income countries have high income elasticities, in the order of 0.8 (Norton et al. 2010). This indicates that, for every dollar increase in income, 80 cents will be spent on food. As countries become wealthier, this elasticity changes. Consumers in a high income country will have an income elasticity of 0.1; for every dollar increase in income only 10 cents will be spent on food. These rich people are very satisfied with their Sunday roasts, their fresh prawns throughout the week, the vast range of vegetables and fruits and delicious desserts. What is at play here is Engel’s law, which is that as people become richer ever-diminishing amounts of their income is spent on food. For the majority of the world’s population who remain very poor, this law is irrelevant. For Australian farmers focusing on China and other rapidly developing countries, Engel’s law is very relevant. The law suggests that we keep a sharp eye on the rate and extent of income growth in China and, for that matter, other rapidly developing countries. Our farmers will need to adjust (change what they produce) as demand for foodstuffs in these countries changes. For example, China’s rapid economic growth will slow down in due course (as have economic growth rates in the industrialised countries), and consumer choices will change. Different foods are likely to be in demand.

China and the rest of Asia Look forward to 2050 and the indications are that for Asia as a whole the population will have grown from ~4 billion to 5.2 billion, an increase of 1.2 billion (marginally more than the number who starve at the present). Only a small part of this increase will be in China; the Republic of Korea is predicted to experience a fall in population; while most of the increase will be in India (an increase of approximately half a billion), Pakistan (an increase of one-seventh of a billion), Bangladesh (an increase of one-tenth of a billion) and Afghanistan (an increase of one-twelfth of a billion). By 2050, China is expected to be an industrialised country with food requirements on a per capita basis not that different to Australia. In the Chinese case, we can think of a convergence in diets: Western diets increasingly influenced by Asian tastes, Chinese diets becoming far more westernised. The case of China is vastly different from that of any other country, yet others will follow in due course. Undoubtedly, the dramatic rate of increase in the Chinese middle class will continue. What is being witnessed in China is being played out to a lesser extent in other Asian countries. We can foresee the time when China will be a middle-class society, comparable to the United States and the European Union. These will be the ‘big three’ economies in the world. They will come to be able to demand, and pay for, increased quantities of foods, and especially higher priced foods. The demand will be for red meats, dairy products, the high-priced seafoods, the exotic fruits; basically the foods that go to make a middle-class diet in most places of the world. As an aside, it is worth noting that the consumption of red meats has reduced in some rich countries, compensated by increased consumption of white meats. Food tastes (fashions) are influenced by health concerns. The educated Chinese are very touchy when a food scare makes the news. Ironically, some foods exported from China are contaminated. For example, in early 2015 packaged berries from China (some grown in Chile) were responsible for several cases of hepatitis A in Australia. There is no other country at the moment that can compete with China for headlines. Here is one pertinent to our discussion. ‘Can China feed its people?’ asked The Guardian

1 – Feeding the planet’s growing population

Weekly (20–26 February 2015) in its front page headline. The following news story told of a middle-class Chinese visitor returning from France and asking ‘Why can’t I have brie in China?’ A reasonable question with an obvious answer: import brie. However, I expect the Chinese tourist wanted locally produced brie. This becomes a wee bit more difficult, as China has to be very smart in allocating its meagre amount of arable land, about 7% of the planet’s total, while it has ~20% of the planet’s people. The same newspaper points out that there has been a dramatic change in Chinese diets, with meat consumption quadrupling in a generation and a further increase in meat consumption predicted. In February 2015, the Chinese Government released its first policy for the year, its guideline for rural reform. We are told by The Guardian Weekly (20–26 February 2015) that it reads like a ‘socialist-utopian checklist’. A rather quaint assertion, as the Chinese have not been socialists since 1979 and I am not convinced they were ever utopians. That aside, the policy suggested the future would be industrialised farms with modern infrastructure. The 1 ha farmer’s plot would be a thing of the past. So would food health scares. I shall let The Guardian Weekly tell this story: ‘many farmers have small plots … and because the land is often sub-standard, they may use noxious chemical treatment … The country has seen countless food safety problems in the past few years, including pesticidesoaked fruit, glow-in-the-dark pork, exploding watermelons and melamine-laced milk.’ One hopes that the Chinese can overcome these problems as rapidly as the newspaper suggests. It is not obvious that they will. In the interim, and possibly indefinitely, Australian farmers could come to play a very significant role in meeting the expectations of the Chinese middle-class food consumer. One Australian newspaper could not miss the opportunity to provide an enthusiastic prognosis for the Australia beef industry. ‘Discussions with Chinese importers have been “quite bullish”’ reported the Australian Financial Review of 16 September, 2014. We shall continue to discuss Chinese food futures throughout the book.

The African case Consider Africa as a whole. The continent’s population will more than double from 2006 to 2050, in approximate terms from approaching 1 billion to near 2 billion.4 The most significant increase will be in East Africa, with an increase of 395 million on top of the present 284 million. On the other side of the continent, West Africa, the increase is predicted to be 316 million in addition to the present base of 271 million. The increase in Central Africa will be from 116 million to 303 million, an additional 187 million people. In North Africa, the increase will be from 198 million to 312 million, an additional 114 million people. Certain African countries stand out in terms of population growth by 2050: Ethiopia with a 95 million increase: Kenya with 49 million; Uganda with 99 million: the Democratic Republic of Congo at 125 million; Egypt at 52 million; Niger at 36 million; and Nigeria at 123 million. These are the countries where many more people have to be fed; otherwise the pot-bellied starving child, hand extended begging for a handful of rice, will not disappear from our television screens any time during this century. How many of these new people eventually will become middle class is not known; very few unless dramatic changes occur in the governance and conflict-ridden cultures in Africa. The continent has the natural resources. It has people who could use those resources to meet human needs. It has little else, and that is the problem. We should hear an African speaking of his continent. ‘The history of our continent is punctuated with greed for our soil and subsoil’: Ibrahim Assane Mayaki, CEO, New Partnership for African Development (NEPAD 2013, p. 5). He does not say as much, but it has

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so been throughout recorded history, from the Romans over two thousand years ago to the 19th century European colonialists to the less-than-scrupulous modern-day local rulers. In the case of Africa, it is not that those with a considered view are not mindful of the problems (population explosion) and the opportunities (bridging the yield gap in crops, developing irrigation infrastructure, and the significant opportunities of genuine free trade in agriculture). Many are analysing and writing of the situation. For example, these matters are canvassed in NEPAD’s 2013 publication Agriculture in Africa: Transformation and Outlook. We doubt that many are taking notice.

Latin America and the Caribbean Taking Latin America and the Caribbean as one, there is a predicted increase in population of approximately one-fifth of a billion, adding to the 566 million at present. Nearly half this increase is in two countries, Brazil (66 million increase) and Mexico (31 million). These two countries are capable of relatively rapid economic development, and one, Brazil, has the potential to expand on its cultivated land, but at what cost to other land values (for example, biodiversity) is a fundamental question we need to address. Much attention is being given to Latin America and the Caribbean as the major food source for the planet’s expanding population. One example of this is the 2014 publication by the Inter-American Development Bank (IDB) titled The Next Global Breadbasket: How Latin America Can Feed the World. We will discuss this potential in a following chapter. Here we will focus on an issue that this article neglects. In discussing the demand side for food we need to recognise that this part of the world still has a lot of catching up to do in eradicating local poverty. That noted, it is recognised that local poverty can go hand-inhand with significant exports of food to those who can pay. Latin American countries have been providing food to the European Union and others while neglecting the condition of their poor. The poor do not own the large ranches and cultivations that produce the exports, and only a few dollars of the ‘trickle-down-economy’ reach the poor who work the farms. The poor, ironically enough, are mainly rural people, as reported by the International Fund for Agricultural Development and summarised as follows: ‘almost a quarter of the region’s rural people still live on less than US$2/day, with a strong concentration of extreme poverty (US$1.25/day) in rural areas among landless farmers, indigenous peoples, women and children’ (International Development Bank (IDB) 2014, p. 9). While this situation continues to exist, Latin America will remain politically and economically insecure. To rely on the region to become and remain a major player in food production is a gamble. It needs to be recognised that three countries dominate food production in Latin America: Brazil, Argentina and Mexico, at 72% of the total; Mexico remains a net food importing country (IDB 2014, p. 10); at a regional level the IDB informs us that ‘many areas within Latin America and the Caribbean are suffering from severe food insecurity, especially in agricultural regions’. The reality is that rich foreign consumers can afford to pay considerably more for food grown in these Latin American countries than the very poor local people can. By and large the good incomes earned by the export of food go to the owners of the large ranches and plantations. The trickle-down is minimal.

Comparing population growth and the requirements for food Compare the population increase reported above for the developing countries to those in the developed world as a whole. The predicted increase to 2050 in the developed world is only 20 million people. Except for Northern Europe where a small increase is predicted,

1 – Feeding the planet’s growing population

Table 1.1.  Countries with very large population increases by 2050 Continent

Country

Asia

India

Africa

Latin America and Central America

Population increase (millions) 500

Pakistan

143

Bangladesh

100

Afghanistan

83

Democratic Republic of Congo

125

Nigeria

123

Uganda

99

Ethiopia

95

Egypt

52

Kenya

49

Niger

36

Brazil

66

Mexico

31

the rest of Europe will experience an overall decrease. North America will have an increase. The data in Table 1.1 (which is based on various sources and estimates) illustrates where in the world the greatest needs for increased food as a result of large population increases will be over the next four decades.

The hungry Using the conventional measurements we can count nearly one-third of the human population as living in hunger. As previously noted, approaching one billion are desperately hungry, living on $1.25 or less per day. This is what the World Bank defines as ‘extreme poverty’. Note that we are measuring this in purchasing power parity terms. This means that in a very poor country this measly sum buys more food than in Australia. There is another one billion or so living on between this amount and $2 per day. On this amount of money one does not eat beef, pork, chicken or seafood unless it is reared or caught by you. Grains, root plants and, in tropical regions where most of the poor live, fruits such as bananas make up the daily diet. Those fortunate enough to live in coastal environments or on the shores of lakes can obtain some protein from the seafood they harvest. A very large proportion of the planet’s poor keep livestock. A family might have, depending on where they live and their culture, a milking cow or two, a few beef cattle or chickens, in some countries a pig. These livestock will be this family’s most valuable asset. It is not simply the denial of adequate food that impoverishes the poor. Certainly the stunting and wasting of young children, which we are informed is widespread in the rural areas of South Asia and Sub-Saharan Africa (Sustainable Development Solutions Network 2013, p. 9), are the result of poor nutrition. The poor are denied much more in terms of lifesupport, things we take for granted. The available data (see UNDP, World Bank, and other official sources) indicates that over one billion of people cannot access clean drinking water. Over one-third of humanity does not have access to sewage systems and waste-water treatment or removal. Serious illnesses and severely shortened life spans are the result. Malnutrition leads to developmental disorders in children. Their intellectual capacity and consequential productivity are diminished. A vicious cycle ensues. Living amid putrid, poisoned and, in the dry season,

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stagnant water leads to a range of diseases, many contagious. A good diet is a necessary but not a sufficient requirement to bring the poor out of poverty.

The causes of poverty The causes of hunger and malnutrition are many. Take geography and one country as an example. Egypt is reliant on a very skinny stretch of flood plain either side of the Nile, until its vast estuary opens up to provide alluvial soils as it approaches the Mediterranean. Travel by boat upstream (to the south) and endless desert is within sight on both port and starboard. When Egypt was part of the Roman Empire 2000 years ago and playing a key role in exporting grains to feed the wealthy of that empire, the Egyptian population was small, and there was no lack of food, in fact a large surplus. Today, with a national population of 82 million, and notwithstanding the Aswan Dam, there are food shortages, and the Egyptian people no longer feed an empire but import grains from around the world, including from Australia. Geography is not the only cause of poverty. A country with very limited arable land and scarce water can be a rich country if its population is in proportion to its resources. Australia is a prime example, and there are others. That is the case today. Debate continues on what the size of the Australian population should be. We won’t explore this issue here.

In conclusion Institutional features such as the nature and competence of governments, the legal framework, the strength of local civil society (in particular the lack of ethnic and religious conflicts) have an overwhelming influence on the wellbeing of nations. This book is not about ridding the Earth of poverty, regardless of the contributors’ desire to do so if they were capable of such an admirable endeavour. It is, however, about the possibility of Australia playing an important role in feeding as many people as possible at an adequate level, now and in the future. This chapter has aimed to do no more than suggest that when folk (well-meaning or self-interested) make statements about Australia’s role and ability to make a contribution to ‘feeding the world’ they need to rethink both the magnitude of the problem and the complexities involved. In following chapters we focus on what we can realistically do. However, before that we must take some time to think about the economics and demographics at play. That is the role of Chapter 2.

2

No escaping demand and supply T. Hundloe

Introduction We divide the global food problem into two broad dimensions: first, the matter of demand and, then, the other cutting blade of the economists’ scissors, supply. Figure 2.1 is the conventional model of demand and supply. Where the curves cross, we can calculate how much of a particular thing will be bought at a particular time and at the market price. Moving these curves around will change quantities sold and prices paid. Demand as conveyed in monetary terms is what the global community will be able to pay to obtain farmed products, both food and fibres. We will concentrate on food, but as food and fibre can be joint products (particularly with regard to sheep) and there is competition for land and water between food products and cotton, we will pay some attention to fibre. There can also be competition for land to grow bio-fuel crops; for example, a considerable amount of corn (maize) is grown in the United States as a source for ethanol.

Supply Supply is what the planet’s farmers are able to do, given available technology and the natural resource constraints they face. We in Australia are a part of the global economic challenge. We can afford the best technology, we have highly skilled farmers, and we have (for the size of the nation) a relatively small area of highly productive farming land. This land is far in excess of what domestic consumers need to feed themselves. So far lucky!

Price/Cost ($)

Supply

Demand Quantity/Time Fig. 2.1.  Conventional model of supply and demand. 23

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Some could see the challenge of growing food as a jigsaw with a huge array of jumbled pieces to be fitted together. There are separate demand and supply schedules for each of the hundreds of farmed products. There are specific demand and supply schedules for the various inputs into farming (such as fertilisers, farm workers, land). While it is realistic to think in terms of ‘world prices’ for many farmed products (those that can be imported or exported), the price of inputs are often country-specific. Labour is very cheap in the rural areas of the poor countries, while in comparison it is expensive in the industrialised countries. Water is very expensive in the oil-producing states of the Middle East (as it has to be desalinated), but fossil fuels are provided to locals at highly subsidised prices. Farming land is expensive if near cities, but there are vast countries with few cities, Australia being one, and much land is relatively inexpensive. The cost of farm labour varies over a great range from a matter of cents per hour in the poorest countries to orders of magnitude more in the European Union, Canada, Australia and New Zealand. A consequence of the cost of labour in the rich countries is the utilisation of much machinery – huge tractors, harvesters, moveable irrigation systems and much more. Scale economies are very important when the costs of capital (the machines just mentioned) are large. On the other hand, where labour is very cheap and harvesting by hand is relatively easy (bananas being a good example), small-scale farms are viable. There are other variables that determine what is grown, in what quantities and over what period. One could assert that each farm is different. The real world of farming is one of highly differentiated soil types, even at the farm level. Variable soils can be noticeable in field crops where there are obvious patches of healthy and less-healthy plants. These differences mean that each parcel of land has a different economic value due to its specific quality, although farms tend to change owners on the basis of averages, with the average yield per hectare determining the selling price of the land. Availability of water, if not provided by irrigation, can also be variable.

Demand We need to commence with what are called the ‘drivers’ of demand. In the main we focus on what will increase demand, although noting that there are factors that reduce demand for certain farmed products. We touched on this in Chapter 2. Here we expand on the issues. Consumers’ incomes and preferences change. The wealthier people become, the less of their income they spend on food in general and certain foods in particular (daily staples are no longer in high demand for the wealthy). The key drivers at an aggregate scale are the world’s population growth and changes in average global income. Behind both population growth and per capita income are the factors that stimulate them. For example, population growth is in the main a function of poverty and a lack of power by women. Income growth is driven up by saving and investment as in China, and driven down by wars as in SubSaharan Africa. Very large families tend to drive down average income, although a family with many children has many workers and no wages to pay and that can offset the costs of feeding a large family.

Global population and demand The number one factor in determining food needs in the future, the one that the United Nations Food and Agriculture Organization (FAO) gives prominence to, is global population growth. The year 2050 is taken as a reference point, and that is not very far away. The

2 – No escaping demand and supply

planet’s population is expected to be 9.7 billion in that year. It could be 9.3 billion or 9.9 billion (or more), but somewhere in that range gives us enough leeway to work with. As we write, the world’s population has just passed 7.3 billion. As noted in Chapter 1, a 2.4 billion increase will, according to the FAO, require a 70% increase in food production. The FAO argues that the amount of grain produced will have to double. This is because a considerable quantity of grain is an ‘intermediate’ product, food for the animals that humans consume. What countries or regions are going to experience the greatest growth in population? This we have addressed in Chapter 1. These are the places where the increased supply of food will need to go, if the objective is to feed people on the basis of need. However, where the increased output actually goes, a matter dependent on consumers’ ability to pay, will have a significant influence on what foods will be required and produced, and in what quantities. This is for two reasons. Countries that become considerably more affluent in the future are going to be demanding different foods from what they demand today, and different foods from what the countries that remain poor in 2050 will demand. As much as we might wish that we could feed the poor, the reality of farming is that costs have to be met. Australian farmers are going to have to keep abreast not only of population changes around the globe but also income changes, if they are to target markets which they can sell into. There is no point in being aware of the rapid population growth in Africa and thinking that there are corresponding opportunities to sell farm products if African incomes are not increasing in line with or faster than population growth. Rapid population growth without increased incomes is the prognosis for Africa and some countries in South Asia. China too easily blinds us to what is happening or, more precisely, not happening, in most of the poor world. At a global level the challenge is great. When we come to discuss the supply side we will get an appreciation of whether or not it is possible to make progress in meeting the global dietary demands predicted for 2050. If this is not achievable, our focus must become managing the size of the human population. It is one or the other; or, possibly, elements of both. Can the world population be contained so that it does not result in a Malthusian undersupply of the necessities for life? We will have to answer that if we can’t find a way to expand global food output significantly and, importantly, devise a means by which the poor get to meet their needs. That is, we might have to come to a view of the size of the human population that can be adequately fed given available resources, technology and science. China has led the developing countries in seeking to match population with available resources. There is no evidence that other developing countries are about to limit their human population growth. Before anything else, we need to disaggregate population growth on a regional or country level, as demands for certain foods are related to not only income but also to geography, culture and history.

Regional/country population growth and demand There are several demographic changes across the world of which we can be confident. The first is that, taken as a whole, there will not be any significant increase in the population of the industrialised countries. Australia stands out as an exception due to its considerable migrant intake. As it seems that both major political parties and, somewhat surprisingly, the Australian Greens, are going to continue to favour substantial migration, we will need to build this into our predictions of Australian farmers’ ability to provide for

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both domestic consumption and export. The United States also is forecast to experience population growth. Numerous European countries will see their populations fall by 2050. With the exceptions noted above, the well-fed rich world won’t be seeking more food. What we will need to do is have an eye for changing tastes, particularly in the rich countries. That recognised, the rich northern European countries where populations are stagnant and incomes are high can be expected to continue to buy Australian agricultural products, but not in increasing amounts. The consumers in these countries purchase as much Australian lamb as they want. Maybe (we don’t know without doing the research) they would be willing to purchase more kangaroo steaks. What have to date been deemed minor food fashions, such as organic foods, could easily become mainstream. The evidence is building. Make an accurate prediction of a major change in food fashions and the ‘first mover’ benefits are for the taking, above normal profits, at least until the rest fall in to line. The fact that much Australian beef, lamb and mutton production comes from natural pastures and can meet organic food criteria would give us ‘first mover’ status if we made organic meat one of our ‘signature’ exports. Australia has more land designated as organic than any other country in the world, a whopping 17 million ha. The nearest any other country comes to this is Argentina, with 3 million ha. When we come to discuss beef production in Australia (Chapter 13) we will expand on this potentially very important fact.

Asia China and India The Asian continent is a mixture of population growth and stagnation. Japan as an industrialised developed country will not experience population growth. The so-called ‘Asian Tigers’ of Singapore, South Korea, Taiwan, and that part of China that was once the British colony of Hong Kong are developed and generally too small to allow for significant population growth even if it was likely, which it is not. The Chinese situation is one of marginal population growth, then the possibility of decline as it reaches maturity in 25 to 35 years’ time as a fully developed country, an outcome expected by most economists. Notwithstanding the recent withdrawal of the onechild policy, the ageing Chinese population puts on delay any near-term rate of change in population growth. As a developed nation in 2050 or before, the typical Chinese diet will be radically different from that of today. Already we are witnessing strong signs of this shift. More on this later. India is the other highly populated Asian country. India and China are on a par at present in terms of population size; however, the Indian population will continue to grow strongly while the country’s economic development is presently much slower than that of China. There are no obvious signs that India will accelerate growth as China did over the last decade and a half. Here is the assessment by an Indian who is close to Prime Minister Narendra Modi: ‘India is where China was 30 years ago’.5 The photograph accompanying the newspaper article carrying this quote showed a slum-dweller showering himself from a broken water pipe in the street in New Delhi. There are number of reasons for the difference between these two countries. First, the Chinese Government is much more powerful and competent in getting things done than is the Indian Government. Only a powerful command economy could have initiated and followed through on a one-child policy; and likewise the industrialisation of China has followed a command economy model, even though since 1979 it has been overlaid with what is commonly called ‘state capitalism’. Command economies are particularly good in deliv-

2 – No escaping demand and supply

ering large-scale projects, while not so good when it comes to delivery of consumer goods, as the Soviet Union proved. India is an unwieldy democracy due to great inequalities in income, education, status, power and influence. There is the continuation, although legally extinct, of the caste system in India. Arundhati Roy, author of the best-selling The God of Small Things, has written an extremely hard-hitting critique of her country’s treatment of its landless poor, the Dalits and Adivasis (Roy 2014). She writes of the vast numbers, 800 million, impoverished and dispossessed. Slums not seen in China for half a century blight Indian cities. While the small group of Indian billionaires and the country’s government talk of massive, game-changing infrastructure projects (super highways between cities, dams galore), a Maoist revolution swirls through the jungle areas of the centre of India. The irony is inescapable: next door sits booming China, a onetime Maoist country, while India faces insurrection by its poorest subsistence farmers who have turned to Mao’s philosophy. Notwithstanding the fertile, productive river plains of India fed every day of the year by the melting snow of the Himalayas, the level and quality of food consumption in India does not match that of China. Only the rich of both countries have similar tastes and incomes able to satisfy those tastes. There are far more poor in India, and there is no easy solution to their plight. Yet India does have one advantage that the Chinese don’t have. It has the advantage of a population with English as its second language, a major plus if the country were willing and able to fund mass education through to university level. This would provide a huge, educated workforce with the knowledge and analytical skills needed to take the whole country, not just its ‘tech savvy’ elite, into the age of modern manufacture. Of course, there is little economic benefit in investing in human capital if there is not complementary investment in industry and associated infrastructure. This is where China is leading the way. The Indian middle class will continue to grow, enabling infrastructure will appear, but there are no signs that most of the Indian people will be dragged out of poverty in a hurry. This will limit demand for most Australian agricultural exports to the Indian middle class. The vast bulk of Indians will survive, to the extent that they do, on their traditional meagre meals of grains and vegetables. They will not be eating Australian farm products unless they are subsidised by the Indian Government. Subsidised food imports cannot be ruled out in the future, when the Indian population well and truly confronts Malthus.

Other Asian countries There are parts of Asia where we can expect fairly consistent economic growth in the decades ahead, and with that a slowdown in population growth. Of countries with significant populations, Thailand, Vietnam and, possibly, Indonesia are in this class. Malaysia has a relatively small population and is far from poor, yet religious and racial differences have the potential to become serious political issues and this would destabilise the country and reduce economic growth. At the other end of the spectrum there are largish countries such as Pakistan, Bangladesh and the Philippines, where for different reasons population growth will continue to be high and economic development seriously lagging. In Pakistan illiteracy stands at ~50%; this equals virtually all of the country’s women except the few in the economic and political elite. Family sizes will remain large. Pakistan is politically unstable. Religious conflicts are bloody. Only the military has some hope of maintaining a sense of order from which there might result economic growth. We can’t expect any miracles in Pakistan. Bangladesh is extremely poor except for an elite, and is constantly troubled by political disputes based on class and, as with many of the poor countries we mention, religion.

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Large families are common. The Philippines is very much a traditional Catholic country and inequality is extreme. The poor have large families. Then there are countries such as Nepal, Burma, Laos and Cambodia, all very poor with no obvious economic development strategy except five-year plans that can look promising on paper. This situation could change. The possibility of benefitting from the ‘out-sourcing’ of basic clothing and footwear manufacture from China offers some hope to start these countries on the conventional development path. Virtually all south-east Asian countries and, ultimately, other Asian countries will come to benefit in due course as China gradually becomes a high-cost country. Already there is an amount of textile production out-sourced from China to other Asian countries. Manufacturers, including Chinese manufacturers, will search for the lowest cost (reliable and competent) producers, first in neighbouring countries where cultures are similar and business easier to conduct, and, as these neighbours themselves develop and become expensive suppliers, move to low-cost African countries where Chinese manufacturing skills could be introduced and enhanced with Chinese-supplied infrastructure.

Asia in summary The total Asian population in 2050 is predicted to stand at 5.2 billion. Much of this is likely to remain poor, too poor to be purchasing anything except basic foodstuffs, such as wheat, from major exporters such as Australia. On the other hand, Asia will have a very large middle class by then. It is possible that in 2050 we would consider all of China middle class, a much smaller percentage of the Indian population, and possibly large percentages of the Malaysian, Vietnamese and Indonesian populations. These newly wealthy people will be in the best position to purchase high-quality, world-priced Australian meats, grains, dairy produce, seafood, wines, and seasonal fruits and vegetables. As we continue to caution, Australia will face some serious competitors as profitable opportunities open up. However, it is not a level playing field. Because geography determines the cost of transport (both in fuel and time), of all the industrialised countries Australia and its near-neighbour New Zealand have a competitive advantage in exporting to Asia. There is also the seasonal advantage that comes from being in the southern hemisphere and exporting to the northern hemisphere. Our summer harvests are available in their winter.

Africa: in two parts There are important differences between the ‘two Africas’ that are separated by the Sahara. North of the desert divide a small number of countries border on the Mediterranean. Their urban inhabitants range from the extremely wealthy, to a sizeable middle class, to slum dwellers. The number of children per family tends to follow the pattern: the wealthier one is, the fewer children. In the rural parts of these countries (Egypt, Libya, Tunisia, Algeria and Morocco), families tend to be large. Diets differ according to income as much as culture and availability of foods. Unless economic development accelerates in North Africa, a prospect for which there is no strong evidence, population growth will ensure that there will be an increased need for food with little prospect of increased local production due to poor soils and lack of rainfall, with the exception of the river deltas emptying into the Mediterranean. The middle class in the North African cities will have the financial means to import foods, as it has done for some time. One can expect some growth in demand for Australian farmed products in North Africa as middle-class populations, with their cosmopolitan food tastes, increase in number.

2 – No escaping demand and supply

Sub-Saharan Africa is the part of the continent that epitomises the great inequality in the distribution of food on a global scale. One cannot be unaware of the famines, the overall general poverty, the civil and regional wars, the devastating disease and the very short life spans of the people in this part of the world. Sub-Saharan Africa comprises 486 countries and a total population of approximately one billion. The predicted growth in population for various countries was the subject of Table 1.1. The numbers are large. In Sub-Saharan Africa we are starting with a poverty of food, subsistence farming (with the notable exception of the agribusinesses that have been established to export food to the world’s middle class), and an expectation of a dramatic increase in population by 2050. Need for basic food will increase in line with human numbers, but there is little prospect that per family income will increase significantly – not at all unless economic growth can be kick-started – from its present below-poverty line. Sub-Saharan Africa faces problems unknown to the rest of the world, yet it is blessed with natural resources. If only the political, economic and social conditions could be configured to allow for their sustainable use. While we wish for this, there is mounting evidence that nutrient mining of soils is reducing yields. There is also a reasonable probability that in decades to come climate change will have a net negative impact on agriculture in the region. There are no signs that Sub-Saharan Africa will be a part of the world where demand for Australian food will increase to any significant extent. The income needed to purchase food (from Australia or elsewhere) will not exist unless a genuine revolution in governance and economics comes about. Can we expect this? Since the end of the colonisation, various outside powers have attempted to ‘export’ their preferred model of government, only to fail. A variety of reasons go to explain this; however, the one all do agree on is the fact that the colonial powers drew artificial boundaries to define their colonies. No, or little, regard was had to community or economic interest, or tribal and cultural sensibilities. Civil and regional wars have been the result. Nothing retards economic development more than war on one’s soil. Redrawing national boundaries could (we won’t say ‘would’) go a long way in opening the way for progress in Sub-Saharan Africa. Only starting with a clean slate could a workable delineation of Sub-Saharan African countries be achieved. Their size and shape would be radically different from those we know. One day this re-shaping of African nations might come. Recent history, Yugoslavia being the prime example, suggests that the redrawing of national boundaries on religious lines is possible. It came at great loss of life in Yugoslavia. One suspects that many, perhaps most, people of that nation would have preferred remaining in a stable Yugoslavia. On the other hand, a large number of European nations that had been at war with each other for centuries managed to cobble together the European Union, and it works reasonably well given the circumstances, unequal financial wealth and natural resources. These points noted, for the foreseeable future Africa will have to work with what exists today. It is extremely unlikely that Australian farmers will be exporting much to Sub-Saharan African countries, while it is possible that some time in the relatively distant future they might have to compete with farmers in these countries to sell into Asia. Sub-Saharan Africa is one of the regions that has the potential to compete on the world scale as an agricultural producer. It has the natural resources, but little else at present, to become a major agricultural region, capable of meeting its domestic food needs plus producing a considerable surplus for export. This will depend on the ability of the leaders of these countries to make radical changes to their institutions and find a means of massive infrastructure investment. While we do not expect that in the medium term, a second-best solution is

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there to be had. The emergence of a technically competent elite, strong enough to reject the spoils of corruption, is the only realistic hope for this part of Africa. With this and foreign investment, there is the possibility of producing a surplus of food to be exported. This would seem to be far into the future. The immediate task is to feed its own people.

The Americas The Americas we also conventionally divide into two spheres, or three if the countries in the centre, including the Caribbean, are separated. As noted previously, we should not expect any sizeable increase in the North American population, other than that the US population will grow as a result of immigration and the large family sizes of some ethnic groups. What of increases in the size of the middle class in Central and Latin America? There are already significant middle classes in most of the countries, plus a few fabulously rich and many tragically poor. This we have already pointed out. The data indicates that on average people in these countries are slowly getting richer. But will that mean that they turn to Australia for farmed products? Highly unlikely, as they farm much of what Australia does and, where this is not the case, the people’s diets differ. Some Latin American countries will compete with Australia in the export of key products. In all probability Latin America will be Australia’s main competitor in export markets. It is already the major competitor for beef, sugar and some grains, and we would expect this to remain the case. We will deal with this in Chapter 4.

Income growth as a determinant for food On an individual basis, income is the key determinant of how much one eats and what one eats. Those on the global poverty line of $1.25 per day have a radically different level and type of food consumption to you or me, the middle class of the world. The super-rich will, because they can, spend much more on food and drink than the middle class does, yet food expenditure will be a very small component of the income of the wealthy. They will demand the rarest seafoods, the best cuts of exotic meats, the most expensive fruits – all the better if they are out of season and cost more than usual. Where their dining bills become an order of magnitude greater than that of the average middle-class person is due to the wines they imbibe with their meals. As that famous Norwegian-American economist, Thorstein Veblen, said, the name of the game for the super-rich and those who aspire to that position in society is ‘conspicuous consumption’. They want to be noticed in the most expensive restaurants eating the dearest foods. Whether or not they enjoy the food more than a healthy farmer enjoys a ploughman’s lunch washed down with beer or cider is not the point. The enjoyment for the conspicuous consumer is being seen, or boasting about, consuming exotic, rare foods. They are equivalent to the pith-helmeted tiger hunter in a post-colonial sub-continent (India, Sri Lanka, Bangladesh and Pakistan) who celebrates in a colonial-style gentleman’s retreat in a colonial-named and designed club, decorated of course with stuffed tigers and other unlucky wild animals. It is all about show and positioning in society. Economists have a name for goods and services which serve this purpose: ‘positional goods’. We have digressed, but with clear intention. Returning to food, in aggregate terms the more middle-class people in the world, the more money will be spent on food, up to a point. We are going to need to estimate this likely increase in demand based on shifts in

2 – No escaping demand and supply

Price/Cost ($)

Supply (inelastic) (2015–2030)

Large price increase

(Demand 2030)

(Demand 2015)

Quantity

Small supply increase

Fig. 2.2.  Increasing demand with inelastic supply.

Price/Cost ($)

income. The rate of increase in the planet’s middle class has to be estimated if there are not to be mismatches between food production and demand. If supply does not grow in tune with demand, there will be price increases. This is illustrated in Fig. 2.2. Demand increases from 2015 to a much higher quantity in 2030. Supply increases by a much smaller amount. Economists define this as a relatively ‘inelastic’ supply response (the steep supply curve in the illustration). In Fig. 2.3 we illustrate the situation where food supply increase matches the increase in demand. The significant increase demand is met by an equally significant supply increase (the near-horizontal supply curve in the figure). Economists describe this as ‘elastic’ supply. The likely case in the real world is somewhere between these extremes. Given enough time and the ability of farmers to respond to increased demand (meaning higher prices), demand and supply could be expected to be in equilibrium once again (the economists’ favourite position). However, there are inescapable physical limits to the increase of supply. If food producers misjudge the dietary changes that are inevitable as consumers became richer, there could be oversupply or undersupply. Either of these outcomes is possible as there is no single global middle-class when it comes to tastes in food. We are using the economists’ definition of ‘tastes’ to mean likes or dislikes. Food is not like television sets, mobile telephones, aircraft seats and motor vehicles, where middle-class tastes are not that varied. Culture (one’s forebears developed a taste for boiled cabbage and it is passed down through the generations), religion (certain foods are prohibited), convenience (one lives near the sea and gets to eat fresh seafood daily if desired) and the lasting nuances of history and geography all can have a bearing on food preferences for otherwise equal people.

No price change

Supply (completely elastic)

(Demand 2015)

Quantity Fig. 2.3.  Increasing demand with perfect elastic supply.

Large supply increase

(Demand 2030)

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Tastes (that word again) can be frustratingly individualistic. Meat eaters without any religious reason have cause to favour either beef or pork, while some are indifferent. Some people like cooked carrots while others will only eat them raw. These few words on the food preferences of humans could easily have us throw up our arms in despair of being able to predict what the food choices of a newly rich society might be. If we are farmers and seek to remain in the industry, throwing up our arms is not an option. Research is required, ideally including visits to our potential consumers’ countries to study their preferred foods. In Australia, we rely on ABARES and Austrade to keep us informed if first-hand observations are not an option.

Accounting for taste in China Let us focus on China, a country that we are starting to understand due to our strong trading relationships. In meeting the long-term food demands of China and other countries to whom Australia is presently a major exporter we need to keep up with, better still be one step ahead of, their trend in food fashions. We already have sufficient empirical evidence to be relatively comfortable with where the Chinese middle-class diet is heading. We would say towards us: more red meats, more dairy products, more big-brand, take-away meals and snack foods such as potato crisps/chips. Yet, food fashions are not a one-way street, and extrapolation could lead us astray. Take our own country as an example. We have a wide range of people who, if not themselves then their parents or grandparents, have come from countries where the Aussie meat pie is not known. Therefore, we would not expect it to be a big seller particularly where cosmopolitan crowds gather. Go to football match in Melbourne, where the crowd could be closer to 100 000 than 10 000, a city which has more people of Greek descent than any Greek city other than Athens, where African taxi-drivers compete with Indian drivers for fares, and Asian, Italian and Greek culinary delights dominate in fashionable restaurant streets, yet you will discover that the meat pie is the food of choice at a football match. In all probability it will be washed down with a beer or a syrupy soft-drink. Would a culinary expert expect this? Probably not. Would a profit-seeking packaged-food supplier neglect this market? Most certainly not. The message is that it is possible to misjudge food tastes without a deep understanding of local custom. Another Australian example is the consumption of fish and chips. Until the Pope revised the prohibition on eating meats other than fish on a Friday, fish and chips was a very popular Friday night meal for both Roman Catholics and non-Catholics alike. The latter knew that this was the day of the week when fresh fish was available. The tradition of fish and chips on a Friday has continued as a secular favourite. And here is a more perplexing case. We might have judged what the food market we aim to serve wants in general terms but not in specific terms. Peking duck, which does not translate into ‘Beijing duck’, remains a favourite dish in China. And so do sweet-and-sour pork, fried rice with egg, spring rolls, and a few other favourites. But here is the surprise. One-quarter of the crispy-skinned ducks purchased in restaurants in China are imported. The ducks are bred and grown in Lincolnshire, England. They are low in fat, and this is one reason (likely to be the main one) that the health conscious Chinese middle class seek them out, so we are told by Ben Chu (2013). This same writer issues a warning to those who might be careless in the food they export to China. He writes that living in China ‘is a life of food scares’ (p. 246). ‘Clean and green’ is what the Chinese want. Health problems arising from contaminated locally produced food, produced with an eye on the bottom line

2 – No escaping demand and supply

and nothing else, is the reason. No wonder the Western fast foods such as McDonalds, Pizza Hut and the rest are increasingly popular in China. However, even international outlets with high reputations to uphold can run into health problems. The Courier-Mail of 29 July 2014 reported that McDonalds removed its ‘flagship burgers’ in China in response to a meat scare. As is common in China, such events soon get a name. Nothing fancy about this one, simply the ‘bad meat’ scandal. Scandals, as they tend to be called, lead to scares and boycotts of the food in question. In a nation that has transformed its economy and dramatically increased its national income in a short 30 years, famine has been extinguished in China. As Chu (2013, p. 42) exclaims: ‘from famine to gluttony in a single generation’. Yet there is still much economic growth required of the Chinese economy before the remaining very poor rural people have the money to purchase English-raised Peking duck. We must expect Engel’s law to apply in China: as the average income increases, beyond a certain point expenditure on food will level off and other goods and services come to dominate consumer spending. There is only so much food one can eat. Increasingly it will be high quality food – clean and green – as the Chinese will, like their neighbours in Japan, take pride and delight in the foods they eat. If Australian farmers and food manufacturers keep this in mind they cannot but succeed in China. It is estimated that there will be in the order of 400 million Chinese with incomes between $16 000 and $34 000 per annum by 2020 (Chan and Zakkour 2014, p. 149). This is considerably more people than there are in the United States or in Europe. Expenditure on food will take a major percentage of their income, between one-third and one-half (Chan and Zakkour 2014, p. 151). This one statistic should be the focus of our farmers’ efforts.

Tastes once again Much of what has been written above does not diverge far from the accepted wisdom. It is safe to stay with that. However, there is no harm in constructing another future – just in case! Popular scientific magazines have been running interest-grabbing stories based on radical shifts in diet: from meat to insects. Are not insects meat? What the magazine writers are alluding to is the substitution of insects and bugs for beef (and lamb, goat, pork and poultry). The writers have no difficulty on seeing the environmental case for this change. They have yet to dig into the economics. What do insects feed on? How do we corral and harvest them? Wild-capture of spiders would not keep a person alive for long. This is not written to deny the case for eating insects. Humans have had their favourite foods including, for some, insects for as long as we have records. But given a choice? The English-owned Australian Agricultural Company does not escape mention elsewhere in this book. Here we can report on the views of its first manager, Robert Dawson, when confronted with the diet of the Aborigines he met in the 1820s. He wrote of the Karuah River people (living near Port Stephens where he took up land) eating the entrails of birds, of eating lizards, grubs, kangaroos and oysters. To quote him: ‘We can join him in the kangaroo and the oyster, while we recoil at the lizard and the grub’,7 then he goes to make the point that in high society England stewed snails were a delicacy and so was blood pudding, blood being abhored by the Indigenous Australians. Dawson understood that the selection of food is a matter of choice, not ‘refinement’ as argued by those who claimed a high position in society. Thorstein Veblen, of ‘conspicuous consumption’ fame, would suggest that we keep an eye on what the planet’s eminent people are eating. As luck would have it, Brisbane was

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Australia’s Role in Feeding the World

Box 2.1: World leaders’ menu WHAT THE ELITE EAT Lunch SALADS: Cairns Vannella Co. buffalo mozzarella with heirloom tomatoes and basil Barbecued new season asparagus, peas, broad beans, goat’s curd and Mount Zero wild olives Kale salad with broccoli, avocado and toasted seeds SEAFOOD: Freshly shucked Moreton Bay rock oysters Cooked Mooloolaba king prawns with lime mayonnaise BARBECUE: Moreton Bay bugs, figs, pancetta and fresh bay kebabs with chimmichurri Smoked and spiced Flinders Island butterflied leg of lamb with yoghurt and eggplant Crispy skin Tasmanian ocean trout, avocado, apple radish and watercress salad DESSERT: Pavlova Source: Courier-Mail, 22 and 27 November 2014.

host to the 2014 G20. The G20 is an international forum for the leaders and central bank governors of the world’s major economies; it comes around every year. It translates into the Group of 20 – at first glance one could assume 20 countries. It is in the order of that number plus a range of multi-lateral (mainly economic-type) organisations such as the IMF. With this background, we get to the point. Box 2.1 presents the lunch and dinner menu for the world’s leaders at the Brisbane G20 in November 2014. No insects on the menu. The Moreton Bay bug is actually a seafood delicacy – think of a large prawn or small crayfish.

3

The global food supply T. Hundloe

Introduction Once we focus on the supply side, there is another set of complex issues to be investigated, some of which are subject to considerable debate. Our aim is to avoid that. We would rather reach reasonable conclusions based on the existing evidence and allow discussions to occur rather than add to any disagreement. That stated, we will not neglect to mention some of the major controversial issues. Is the growing of bio-fuel feedstock (such as corn in the United States) reducing the supply of corn-based foods to such a significant extent that their prices are increasing? Are the poor of the world suffering more than usual due to the allocation of corn to bio-fuel production? Is the increasing propensity, most notable in Europe, to reject geneticallymodified (GM) foods hindering the development of higher-yielding crops and/or animals? Will anti-GM attitudes spread to rapidly developing countries such as China and, if so, what is the consequence? Will agricultural science in its multiple sub-fields continue to produce increased yields per hectare, or more importantly per dollar spent on the farming enterprise, or has science run its course – so that we cannot hold out for a 21st century Norman Borlaug? Will the world’s middle class be willing to pay a premium for organically grown foods? This last question raises one of the great ironies of the modern world. The wealthy middle class is willing to pay more for free-range poultry, eggs, beef and lamb, while in some parts of the world the planet’s poor get to eat free-range food as a consequence of rearing village chickens and cattle and maintaining household gardens, all thriving without chemical applications! If we glance to the recent past, we will not overlook the enormous benefits that Norman Borlaug’s ‘Green Revolution’ brought. It is the conventional wisdom that had this not occurred the planet’s farmers would have been able to feed no more than half the present global population. Yet, as numerous researchers have noted, there have been negative aspects to the Green Revolution: the application of excess nitrogen fertilisers doing damage downstream, the negative impacts of monoculture on biodiversity, and the exclusion of the poorest farmers from the revolution. Before proceeding too far, let us put farming into a historical and biological perspective. From history we can only take lessons.

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A note on the history of agriculture and its unlikely repeat The Agricultural Revolution is in the order of 10 000 years old if we deem it to have started with the domestication of plants. Condensing the story to the bare bones, the first farmers saved a few seeds of various edible plants (most likely the grains or fruits of the plants) and planted them as we would do in a backyard garden. In all probability, these proto-farmers would choose the plants of the same species with the largest or most tasty grain or fruit. With this, humans were on the road to selective breeding. The following season, the farmers would select some seeds from the ‘best performing’ plants to sow for the next season’s crops. And so on. Not to deny nature a role in this, Darwinian ‘natural selection’ also had a hand in improving the species. Some seeds grew into plants that were better at surviving whatever the climatic conditions and soils they were planted in, and so reproduced more successfully. Humans did not influence this. Both proto-farming and Darwinian natural selection were at play in the Fertile Crescent, in what today we call the Middle East (that part of it stretching from Anatolia in modern Turkey, southwards down the coast of the Mediterranean Sea, then east to the once very fertile plains formed by the Euphrates and Tigris rivers of modern Iraq). The name Fertile Crescent gives the game away. It was a wonderful agricultural area fed by two rivers. Eventually irrigation was brought into play as the early cities in the region grew and more food was required. Irrigation was seriously overdone, and without knowledge of its adverse impacts much of the area eventually became desert. Desertification is a slow process. Yields decrease gradually and increasingly over a long period. Salts form a crust on the soil once it no longer has nutrients to feed plants. The end result of this process we can witness on television broadcasts of the war in modern Iraq. Much of the country is a desert. The Agricultural Revolution was not a linear or geographically determined event. The domestication of different plants occurred in different places at different times. For example, the grains we now know of as wheat and barley had their domestic origins in the Fertile Crescent, while rice and millet had their domestic genesis in China, corn in Mesoamerica and sorghum in the Sahel of Africa.

Where history has taken us Move forward to the present and we find that we rely on 12 crops that have been selectively bred over the past few thousand years: first the cereals – wheat, corn, rice, barley, sorghum; then the pulse soybean; the roots we call potato, manioc, and sweet potato; the sugar sources cane sugar and sugar beet; and the fruit bananas. Of course, you will be able to nominate a much larger range of plants from your daily diet if you are of the middle class. Yet these additional plants are minor in the scheme of things compared to the ‘big dozen’. There is a ‘big three’ of wheat, corn and rice that either directly or indirectly (as animal food) account for 80–90% of the calories consumed by humans. For all our efforts we have not been able to domesticate and selectively breed more than a dozen major plants. There are numerous minor ones. As there is no evidence of a new era of plant domestication, we are going to need to increase production of the major ones, in significant quantities, to feed the extra two billion plus humans that will exist in 2050. It is important to note that the wheat, corn and rice we consume today are the result of selective breeding. While the history of farming is a history of experimentation around selective breeding, what happened in the late 1950s into the 1960s was revolutionary. The increase in crop yields in this period came to be called the ‘Green Revolution’. This is when

3 – The global food supply

a spurt of experimentation with breeds coupled with very significant increases in the application of artificial nitrogen fertiliser and increases in irrigation led to ‘new’ varieties of wheat, rice and some other cereals. As already mentioned, there are question marks as to the net benefits of the Green Revolution. The negative impact of major concern today is the use of nitrogen fertiliser in large quantities, where a considerable amount of it flows out of the field and into waterways, doing, when concentrated, severe environmental damage. There is no new Green Revolution on the horizon. Does this mean we move further into genetic modification (GM) of plants and animals in search of larger yields by which we can feed the increasing human population? The advances in agricultural research and development are such that in the order of 2600 new varieties of staple crops (those of the big dozen) have been developed in the first decade and a half of the 21st century. This might not matter much because we rely on a handful or two as noted above; but improving the yields of these major crops will be a significant benefit. Agronomists talk of the yield gap: the difference in the amount of, say, barley per hectare grown on a farm and what could be grown ‘in the best of all possible worlds’. Yield gaps vary around the world and tend to be largest in the poorest countries, smallest in the industrial countries. This is not unexpected. The difference in the application of fertilisers, the use of pesticides and the application of water go a long way in explaining the variability in yields. Economies of scale are also relevant in comparing yields. The industrialised countries have large farms; the poor countries have small family or village plots. The latter suffer from diseconomies of small scale. There are advances we need to note, for example the development of improved livestock medicines and vaccinations leading to more successful control of animal diseases. This has been for the good. In Australia, experimentation with sheep and cattle breeding was essential for the development of the merino-based wool industry and tick-resistant cattle. Many other examples could be reported. We don’t know if we have reached a limit in scientific advances or if more are around the corner.

Vagaries of nature There are the rather frequent but unexpected vagaries of nature to be built into our understanding of farming. We must never overlook the fact that the supply of food is dependent on nature more than any other human need except water. And rainfall is top of the list of nature’s contributions to what we eat. In Australia today we have a reasonably good dataset going back a 100 years or more on which we can make predictions of droughts and floods, assigning probabilities to extreme weather events. That is, we can make decisions on the basis of the ‘100-year’ flood and El Niño–La Niña ‘cycles’. The seasonable monsoons in the north of the country are, with good empirical evidence, taken as given. If we are attuned to longer cycles, we build in probabilities of droughts in our farming planning. The vagaries of nature are coming to be better understood, and while we can’t change their course we can ‘work around them’, assisted by government policies that allow farmers to average income over several years for taxation purposes. While we have made progress in our assignment of probabilities to ‘normal’ climatic weather events, the threat of serious deviations and long-term changes as a result of climate change confound our assignment of probabilities the further into the future we attempt to look. This is certainly not the time to relax on our scientific endeavours to understand climate and how it is influenced, and to act on that science.

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Major increases in world market prices result from droughts (more so than floods), and more humans join those starving as droughts endure for long periods, up to 10 years in Australia. Fortunately, major crops such as wheat and rice are cultivated in diverse parts of the world and it is extremely unlikely that a drought or other destructive weather events would occur simultaneously in all regions of the globe where these grains are grown. In Australia, the wide geographical range of wheat growing makes it unlikely that there will be crop failures across the nation in any particular season. This is a significant advantage for the Australian wheat industry. Of course, there is still a reduction in the harvest if part of the national crop is lost through drought. Because we can generally, but not necessarily in any particular country, ride out droughts due to the fact that staples are grown in diverse areas of the world, a drought in Australia can be compensated by a good season in America, and wheat imports to a third country won’t be reduced when they are needed. When all major producers of a staple have a good season, the world price will drop. Good for consumers, not so for farmers. This does not rule out the occasional widespread poor season and across-the-board price increases.

Geography matters By 2050 we will have had to increase food supply by ~70% if we are to feed the predicted 2.4 billion increase in the human population. That amount is the average across the world. An increase of 100% (that is, a doubling) will be required in the developing countries, most of which are in Sub-Saharan Africa. As water for agriculture accounts for in the order of 70% of water withdrawn from nature, and irrigated agriculture accounts for ~40% of global food production, we face a critical challenge in water management, within nations and across jurisdictions, if we are to attempt to meet these food demands. Water and good quality soils are not evenly distributed around the world. Of course it is not just these two biophysical features that limit our ability to produce enough food for a significantly increased human population. Geography, in terms of terrain, proximity to ports and length of the growing season, along with some very basic economic, social and cultural factors (such the investment in roads and dams, food preferences, the functioning of markets, and land ownership) puts limits on food production. With all these factors in mind, let us pursue questions that will help us ascertain the potential to increase the planet’s farmed output.

The availability of land How much land is there in the world? We can exclude Antarctica and come up with 13.3 billion ha. This is a very large number, and when we note that only 11% (1.6 billion ha) is presently used for cultivation, the area intensively farmed seems insignificant. If so little is under cultivation, surely there must be scope to expand? Any optimism of expanding cultivation is soon dispelled by noting that the uncultivated parts of the world’s land have values other than cultivation; and even if this was overlooked, to bring much of this land under crops would require the provision of water far in excess of normal rainfall. Vast investments in dams and associated infrastructure would be needed. Few societies are rich enough to countenance massive infrastructure developments. We shall return to this in later chapters, but note here that one of the significant advantages Australia has is its very large amount of rain-fed, grazing grassland-cum-woodland. A lot of it is semi-arid or arid, with rainfall minimal. However, Australian pastoralists

3 – The global food supply

have learned to farm within these constraints. Australia’s beef, wool and sheep meat industries are based on this extensive savannah and near-desert country. That we can use this land and earn considerable foreign income is one of the strongest reasons to celebrate our luck and our endeavours in making grazing work in such poor country. The existence of this land is the major reason that it is possible to be optimistic about Australia’s agricultural future. It is difficult to think of any other specific resource endowment that will favour Australia to the same extent in the years to come. For many Australians it is novel to think of the semi-arid country and its savannahs as valuable resources – this is because few know this ‘outback’ country. It is cattle and sheep (wool) country producing food for these animals without fertilisers or pesticides. It is not irrigated land, although without bore water, the occasional permanent water-hole and the rain when it decides to come, it would not carry introduced animals. As long as this country is not overgrazed (particularly in drought periods) its yield in organic beef, wool and mutton should be genuinely sustainable – environmentally and economically. While it is likely that there are very limited opportunities to expand production in this area, the increased global demand for red meat will be reflected in increased financial returns to the pastoralists. This good luck will not necessarily be the outcome in the farmed land that relies on fertilisers, improved pastures and irrigation. Even more can be produced on this land (in reaction to increased demands), but there is likely to be a corresponding increase in farm costs – more fertilisers and more water.

Opportunity costs The economists’ concept of ‘opportunity costs’ cannot be pushed aside when cultivation is being assessed. Land can be valuable for uses other than cropping and intensive farming. On a global scale the estimates of the types of land in non-cultivated uses are: 28% forested land; 35% grassland-cum-woodland; 22% barren or sparsely vegetated; and 3% covered by the impervious surfaces of cities, industrial complexes, ports, roads and rail-lines (see Table 3.1). If we focus on the 1.6 billion ha of the global land that is cultivated it is, as you expect, the best, the most productive farming land; however, increasingly marginal land is being brought into cultivation, primarily due to increased urban populations seeking inexpensive food. This often means farming on the edge of cities to reduce the costs of transporting food. In the developing nations, rural people who migrate to the cities are poor. If they find work in the cities, something they tend to do as they will work for minimal wages, they can only afford the cheapest of foods, hence the importance of basic food items grown nearby with minimal transport costs. This is the reason that marginal land around cities is Table 3.1.  State of the planet’s land use Land use

Percentage share

Cultivated

11

Forested

28

Grassland/woodland

35

Barren/sparsely vegetated

22

Cities

3

Total

99

Source: Fischer et al. (2009).

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brought into cultivation. The irony here is that in many cases the best farming land was covered by tar and cement as the city gobbled it up, and it is the poorer quality land that has to be used for farming once agriculture has been pushed out by urban spread.

The loss of land to urbanisation Around 50% of the planet’s people live in urban settlements, and by 2050 the percentage is expected to be 70%. Most large cities tend to be built around the mouths of major rivers for the obvious reasons that this is where natural harbours and ports are located and is where our agricultural ancestors grew food crops. Today, river flood-plains and their silt-built alluvial soils have been either bulldozed away for residential housing or covered in tar and cement; in either case they are lost to farming. The area removed from cultivation might be small overall, but when cities are built on prime agricultural land the impact on food production is far more than proportional. Food has to be grown on poorer soils or transported greater distances. There has not been a thorough cost–benefit analysis done on increasing urbanisation and, in particular, on urban sprawl. If it were undertaken, such analysis would measure the forgone benefits of farming on good soils that have been lost to city spread. We don’t know whether in economic terms city-building is worthwhile or not. There are very significant economies of scale to be had in city formation, and therefore it cannot be all bad. We know that rural people will continue to flock to cities, and this suggests that city life has more benefits than costs – as long as someone, somewhere, continues to grow food. Expanding urban populations mean that fewer farmers remain to supply food for the expanding non-farming communities. The consequences of this differ quite dramatically society to society. Whether ancient Rome or modern Tokyo, city people could, and can, rely on importing food. In the case of ancient Rome the conquests of fertile lands throughout the Mediterranean solved the problem. In recent times, the Japanese grew rich enough selling motor vehicles and many types of manufactured goods to buy foods, both exotic and expensive (seafoods in particular), or common and inexpensive (such as wheat). Not all societies are this powerful (as was Rome) or economically strong (as is Japan). Today as Sub-Saharan African cities expand in population, the remaining rural people, mainly subsistence farmers, have little scope to feed themselves, let alone provide food to their fellows in the cities. The poor who live in the cities are neither rich enough to import food nor powerful enough to conquer fertile lands. As a consequence we witness, and they experience, severe poverty when crops fail, when fresh foods perish through transport inadequacies, when civil war curtails the transport of food from the countryside, and when criminal gangs hijack food given as aid. Add to this that some of the rural poor are losing control of their land as foreigners purchase large areas with an eye to their own future food security. In the Introduction we said that foreign landowners cannot take the land away. This is only partly true. The nutrients, chemicals and water embedded in the food grown in foreign-owned land are taken away in the food. If you grew the food, you own it. If you are from a wealthy Asian or European nation, the food goes to your country. Poor farming practices degrade land Arable land is lost for reasons other than urbanisation. A classic case of over-irrigation destroyed the fertile flood plains of the Euphrates and Tigris rivers in ancient Mesopotamia (now Iraq). Over-irrigation tends to be a recurring problem that each new generation of farmers has to learn – only after considerable damage has been done. Fortunately, nothing as dramatic as what happened in ancient Iraq has happened in recent times, yet the

3 – The global food supply

Russians were on that downward path with the expansion of agriculture in the vicinity of the Aral Sea. There is the gradual loss of prime quality land due to poor farming practices such as over-watering, overgrazing, wind erosion, nutrient mining, salinisation, pollution and compaction of top soil by heavy farm machinery (in the latter case assuming you are fortunate enough to own tractors and harvesters). It has been estimated that on a global scale between 385 and 472 million ha of previously cultivated land has been abandoned to farming because it has lost productivity to such a degree that farming is no longer an economic proposition. Compare this amount of land to the remaining prime cultivated land and we have witnessed a loss equating to between one-quarter and one-third of the latter (Fischer et al. 2009). The situation is destined to become worse, with forecast annual cultivatable land losses of more than 10 million ha/yr. We shall deal in some depth with farming practices and how to improve them when we discuss a range of different farmed products in Section 4.

Idle farming land in the former Soviet Empire There can be temporary reductions in the amount of cultivated land. This became noticeable with the collapse of the Soviet Union in 1991. In Russia and those parts of the Soviet Union that reverted to independent nations, the end of a ‘command economy’ and collective farming, with no realistic plan to move to a market economy, resulted in the dereliction of good quality farming land, as well as several other economic dysfunctions. While Russia and these other former Soviet countries are able to make money out of oil and gas they are not thinking about farming. Their mining industries – like Australia’s – have finite lives, and this good agricultural land will not remain under-utilised forever. Farmers in other countries, including our own, need to be aware that when this land is brought back into production there will be a significant increase in global agricultural output. As much as a modern farmer has an eye on the weather, he/she needs to have the other eye on aggregate demand and supply, and shifts in these variables in unexpected places. Competitors can arise in such places. What if climate change favours the vast cold lands of Russia? With a warmer climate it has the potential to be a major agricultural supplier and exporter. Do not overlook the size of Russia, with a relatively small population to support. It is not only Russia. A few of the once-Soviet countries are not comprised of ‘2 ha plots’ but are potentially substantial modern agricultural nations. The Ukraine stands out. It has in the order of three million ha of under-utilised farmland. The irony is that with the collapse of collectivised farming and the allocation of tiny private plots, the once-significant economies of scale have been lost. Apparently laggard collectivised farm workers could produce more per hectare than private owners can on tiny plots. We need to keep an eye on Ukraine. The agricultural potential is enormous – yet it is conflict-ridden and land lies dormant. Considerations such as these must play a key role when Australian farmers assess the potential benefits and likely risks of deciding to make large investments in new agricultural pursuits. There are competitors out there with their own potential to expand. From a financial perspective this is a crucial consideration. Knowing that farmers in other countries will have their eyes on opportunities that result from increased population and better incomes is the start to realistic risk-taking and making wise decisions. As each and every farmer, wherever in the world, has the same incentive to increase supply (or attempt to increase supply), there are no formal theories (except the law of demand and supply) to guide decision-making. However, as we will explore later, there are sensible strategies to pursue.

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Table 4.2.  Cultivated land today Location

Million ha

Percentage of land area

North America

230

11

South Asia

229

35

Eastern Europe and Russia

205

11

East Asia

151

13

South America

129

7

South-east Asia

97

22

West Africa

86

14

East Africa

83

9

Australia and NZ

51

6

44

34

225

14

South Europe Others Source: Fischer et al. (2009).

Where do we find the planet’s cultivated land? The figures for the area of cultivated land in Table 4.2 tell us something about the availability of existing cropping land, but little about agricultural production per se. In this context the data are potentially misleading, but they do point to the geography of good soils and rainfall and where to focus if the main game is increasing yields in the already farmed areas. The latter, we will keep emphasising, is the first place to look for increased food supply. Cultivation is not everything. Australia has a very large area of savannah and semiarid grazing land which is utilised to produce beef and wool. Both are very important income-earning exports for Australia. Other countries likewise have large areas of noncultivated land that produce considerable farm income from grazing. This is what we could call ‘free-range grazing’, as the pastures are not improved by irrigation and fertilisers. Two questions that Australia is facing are: should some of this grazing land be turned into cultivation through very costly investments in new dams, and should there be more improved pastures where native grasses are replaced with exotics and fertilisers are sprayed to promote growth? More cost–benefit studies are required, but such studies will only help if the analysts are able to come to reasonably accurate estimates of future demand, and in particular whether there is going to be a significant premium for organic or free-range beef. Land per capita The amount of cultivated land on a per capita basis presents a different picture from the aggregate level presented above. Population densities make a significant difference in our conceptualisation of the potential to produce food for domestic consumption plus generate a surplus for export. In a world where international trade in foodstuffs and fibres is the norm, it would seem unnecessary to calculate the amount of cultivated land per head of population on a country basis, yet the notion of food security on a national basis has continued to dominate thinking. In part this is due to the distant memories of severe rationing during the Second World War. In more recent years, some countries and regions have been caught in dire situations regarding a lack of food as a consequence of regional and/or civil wars. Several countries in Sub-Saharan Africa fall into this category. Furthermore, there

3 – The global food supply

are countries on which trade sanctions have been imposed. In sum, it is understandable that food security can be a country-specific concern and, hence, attention is justifiably paid to an individual country’s production possibilities. Of course, it is not purely a matter of population densities but also of the availability of cultivatable soils, the right climatic conditions, existence of the necessary infrastructure and the level of economic development that in combination determine the food production state of a nation. These factors combined result in a very low level of cultivated land in most of Africa (generally less than 10%), while Southern Asia, Southern Europe and Western Europe have one-third or more of their land under cultivation. However, be mindful of the fact that tribal pastoralism (the grazing of herd animals) is common in large parts of Africa and, hence, the area cultivated per person does not capture the food available per person. In the main it is because of geophysical and demographic reasons that Australia and New Zealand have such a small area under cultivation. This is discussed in much detail later when we focus on particular agricultural pursuits in Australia. On a per capita basis Australia and New Zealand stand out, far ahead of the rest, at 2.2 ha of cultivated land per person. Northern Europe follows with 0.72 ha per person. Eastern Europe and Russia combined are the next best placed region, with 0.68 ha per person. Highly populated Eastern Asia has 0.10 ha per person, and so has Northern Africa, which is predominantly desert. Forecasts have been made as to the change (a reduction except for Eastern Europe and Russia) in the quantity of cultivatable land per person which will be available in 2050. Here we are not factoring in land conversion, rather demonstrating the impact of population increases or decreases. Australia and New Zealand, with Australia’s predicted high level of migration, will experience a significant fall from 2.2 ha to 1.5 ha per person, in other words a 0.70 ha decrease. No other region is to experience this significant change. The closest another region comes to Australia and New Zealand is Central Africa at a loss of 0.25 ha per person. Where is this leading us?

How much land is needed? Norman Myers (1998) has estimated that one person requires in the order of 0.07 ha to be adequately fed on a sustainable basis. Of course, where one eats on the food chain (grains or grain-fed meat), the productivity of the soil and the length of the growing season mean this is an average with a wide range. Across the globe the amount of arable land has been estimated to be less than 0.1 ha per person (Fischer et al., 2009), which suggests a precarious situation and, most importantly, an increasingly difficult one as the global population increases. Not all land is available for cultivation The amount of presently cultivated land is not necessarily the end of the story. Fischer et al. (2009, p. 10) write: ‘substantial areas of productive land may be available for conversion to cultivated land’, but these authors don’t hesitate to add the following caveat: ‘Part of this land is to be excluded, such as land that is legally protected, otherwise reserved for natural conservation, for safeguarding genetic resources, biodiversity and areas with special nature values’. As the same authors point out, the land that is suited for cultivation but presently excluded is virtually all under forest or is grassland-cum-woodland ecosystems. Herein lies the challenge: how much, if any, of this presently uncultivated land could, or should, we cultivate? Where is this land?

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In the Australian case much of the protected areas are covered by rainforest, most of which is mountainous country. Most of Australia’s near-coastal national parks and World Heritage areas are rainforested mountains, saved by their rugged and elevated terrain from clearing. Even if we were to discount the biodiversity, eco-tourism and climate-regulating functions of this land, it is unlikely to be an economic proposition to clear and cultivate it. Staying with Australia, there are very large tracts of grassland and woodland on which sheep and cattle graze. Much of this land is savannah, while some is near to being desert. Assuming one wanted to plough and seed this land, there would be very significant opportunity costs, that is the loss of income from grazing. Yet this might be outweighed by better profits from cultivation of this land. However, it is the net benefit, after constructing dams and irrigation infrastructure, that makes or breaks a proposal of this kind. These are issues for more detailed discussion in following chapters when we have come to a better understanding of Australia’s climate, soils and water resources.

Where are we to find scope to increase cultivation? There are several critical considerations in answering this question. For example, we know that in the less populated areas of the planet there are large areas of land that could be cultivated, and rain-fed crops could be grown at various scales from small farms to giant broad-acre industrialised operations. However, governments have made wise decisions to give much of this land a ‘protected area’ status, either as national parks or something similar. The motives for this designation of land are obvious: the protection of biodiversity; for nature appreciation and recreation use including eco-tourism; and to maintain genetic resources. There would need to be a desperate global shortage of food, and that is only foreseeable if the human population explodes beyond, say, 12 billion, for one to countenance opening up protected land for cultivation or grazing. It is far more sensible and economically viable to ensure that the human population does not result in a Malthusian overshoot. Yet, a warning is called for. There are powerful political and economic forces who are seeking to wind back the protected area estate in their countries. The United States provides a salutary example. The story is captured on the front cover of the February 2015 edition of Harper’s Magazine: ‘The Great Republican Land Heist’ (Ketcham 2015). This is a tale of graziers illegally running stock on Bureau of Land Management protected land, and when challenged refusing to remove their cattle. Even court rulings to desist grazing are ignored. Rifles are pointed at rangers. The ungoverned ‘Wild West’ is returning and the authorities are fearful of antagonising the powerful Republicans. To return to the Malthusian matter, the population control project is not without cost. Women have to be educated. Patriarchal societies turned around. The success of China versus the failure of India to control population growth suggests only very strong (authoritarian) governments can change values, attitudes and practices in poor societies. In rich societies, economics does the work of the family planner. The dilemma is that it is difficult to become rich in a Malthusian world. If all that is possible is to feed the population today, there is no surplus to invest, and no money to fund education and family planning. Outside the protected area regimes there is, again on a global scale, much land that is presently grassland/woodland/open forest, and some of this at least is suitable for conversion to cultivation. Significant areas of this land are being grazed by cattle, sheep and goats raised to provide food for humans. Whether grazed or not, this land has biodiversity value and other values and uses, such as watershed protection, or nature appreciation-cum-tourism values if access is easy and tourist interest high. Changing these lands to cultivated

3 – The global food supply

fields should never be done lightly. We have at our disposal various scientific and economic tools (for example, cost–benefit analysis) that can assist us to make informed decisions, mindful that the extent and accuracy of the economic data we can gather will not be as accurate as we would prefer. However, much of human decision-making is likewise constrained by crude data, and therefore, cost–benefit analyses should be the starting point.

Protected area land (national parks and the like) Fischer et al. (2009) have made an attempt to categorise the existing protected areas around the globe into those called ‘strictly protected’ and those ‘less strictly protected’. The second category comprises land which, according to the authors of the concept, can be made available for what they term ‘sustainable agricultural practices’, these being subsistence farming, including subsistence livestock keeping by indigenous people, or by people employed to protect nature, such as rangers living in the area. The authors of this concept describe these activities as ‘small-scale traditional agriculture’ (Fischer et al. 2009, p. 11). Of the 1472 million ha of protected land globally, it is estimated that there are 457 million ha that fall into the category where this type of traditional farming could be allowed. If this ‘less protected’ land is presently not being farmed and is added to the total of available arable land, the latter would increase by ~11%. Regions where there is a more than a small amount of ‘less protected’ land are Western Asia, Eastern Asia, South America and Central America. The six regions with the greatest absolute amounts of protected area land are, in decreasing order, Northern America (271 million ha); South America (231 million ha); Eastern Europe and Russia (180 million ha); Eastern Asia (155 million ha); Eastern Africa (117 million ha); and Australia/New Zealand (88 million ha). These six regions of the world’s 20 regions account for just over 70% of the planet’s protected area (both categories combined). In Northern America, Eastern Europe/Russia and Australia/New Zealand there are insignificant areas of ‘less protected’ land, and hence the scope for small-scale traditional farming, assuming there were people interested in it, is quite limited. What can be deduced from the above is that there are parts of the world where traditional small-scale farming is presently taking place and this could be expanded, although not greatly, and hence provide a subsistence life-style to an increased population in these areas. Grasslands, woodlands, forest land and barren land This leads us to the types of lands which, given certain biophysical and geographical features, could be considered for cultivation. As Fischer et al. (2009) report, there has been considerable effort put into attempting to determine the suitability of these lands for conversion to cultivation. More often than not, it is not the land and soils that provide the answers; rather it is the availability (and cost) of water, the climatic conditions, and a ­complex range of human factors. We attempt to add some light to these considerations in Section 2. The issues we have raised do not cover the full spectrum of supply-side factors, which in the conventional economic manner will join with consumer demand to form the scissorlike determination of aggregate production and consumption of agricultural products. As population numbers change, as income grows and as diets diverge from today’s, any temporary equilibrium at which quantity demanded and supplied meet at a market-clearing price will shift to a new equilibrium; and again, and again it will shift because the idea of permanent equilibrium is not realistic. Too many variables are involved. Population numbers change, diets change, technological advancements enhance agricultural production, and we

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expect serious climate change in generations ahead (if nothing is done to stabilise and then reduce the human-made greenhouse effect) to have both significant adverse impacts on agriculture in some regions and beneficial ones in others. What these various factors suggest is that wise farming decisions are ones that permit reversibility, that is, flexibility, in land use. In Australia we have a prime example of this in the use of grazing lands: a generation ago, there were 140 million sheep producing wool; today there is half that number and the land sheep once grazed is today generating profits for cattle grazers. Substituting cattle for sheep, or the converse, has long been a feature of Australian grazing. The largest pastoral property in Australia, Anna Creek in South Australia, was originally a sheep station but now runs cattle. Other land that once carried sheep is now under cultivation for wheat or sorghum. These changes have been a reaction to market forces, and have been possible because the land was not irreversibly modified. Cattle land could very easy revert to sheep grazing if the economics changed once again. Wheat growing could expand into areas where other crops are grown if the economic circumstances warranted that. Yet another Australian example, one not as easy to implement but that is occurring, is the conversion of apple orchards in Tasmania to cherry orchards, again based on the notion of putting land to its highest valued use. Reversibility of land use is a fundamental principle of economic sustainability.

Faulty telescopes Sustainability requires maintaining healthy ecosystems, realistic farm incomes, consumers getting healthy foods, and a society that values these goals. To achieve these outcomes requires thinking long-term and wise allocation of land and water before the costs of reversing poor decisions become a major political problem. Poorly thought-out decisions in the past are the cause of our near-inability to resolve water allocations in the Murray–Darling Basin. Taking a wrong turn early and following it for too long results in the most difficult journey to a desired goal. Far too much effort has been wasted in trudging along the wrong route trying to fix the Murray. Much political strength and commitment to a desired end is required to retrace steps and start afresh. It is wise to prohibit the taking of good farm land for city-building, regardless of how attractive that land is for developers and, it has to be said, for farmers keen to sell given the immediate financial rewards on offer. It is a wise government that prohibits urbanisation in a river valley that could be maintained in a near natural state to provide much-needed water for a city or to grow food. Serious, forward-looking land-use planning is a prerequisite for a sustainable future; however, there are likely to be situations where the planners will have to override the power of urban developers (and their money) and protect prime farm land by fiat. Market economies and short-term political populism suffer from what the early 20thcentury economist Arthur Pigou called a ‘faulty telescopic faculty’. As self-interested individuals, we cannot see the future clearly, and hence we discount it. Someone, and that has to be a far-sighted government, charged to safeguard the future, has to take responsibility. Farmers call for action to protect their land, but they are but one voice, except when joined by environmentalists. Land-use planning that would protect agricultural lands seems to have gone out of fashion, and all, except the lucky speculators, loose. As we discuss in Chapter 9, the conflict between miners and farmers is leading to governments coming to play a more far-sighted role than previously. In this case, prime farm land, usually small in area, is being protected.

3 – The global food supply

Whose water? It is not wise to allow the strength of city voters take control of water that serves the purpose of farming. A city that is allowed to grow too big and then have its residents clamour for water is not a sustainable city. As we write, a controversy has arisen as to the future demands on the water captured and held in the Tinaroo Dam on the Atherton Tableland just west of Cairns. The water storage was built to supply water to the farmers in the northwest of the Atherton Tableland, an area much dryer than its nearby tropical rainforest country. Cairns has become an expanding tourist city, encouraged to grow by politicians and local business leaders. The farmers using the Tinaroo Dam water were there long before the recent urban arrivals. This is a regional planning issue that should have been thought of before city expansion was promoted. The fashion these days is to construct markets for water. In theory this makes sense, if it can be assumed that those who can make best (economic) use of water will pay more than those with less need of it. But what if these rules bring city folk into the market? It would not be wise to allow the strength of the purchasing power of city folk to trump farmers in the purchase of water. This could happen if there was a free (free-for-all) market in water. There are far more city dwellers than farmers in most parts of the world, and in aggregate they have much more money than farmers. There will be many more city folk by 2050. Undoubtedly, city people need adequate water for household consumption, and various non-farm industries need water; however, because the cost of water is a minor consideration in the city and for most city-based industries, their willingness to pay per litre far exceeds the ability of the average farmer to pay. Only when farm water has dried up and farm produce is significantly reduced will the urban dweller realise that it is self-defeating to pay more per litre for water than the farmer can afford. The city-dweller is soon paying much more for farmed produce. As a result of the farmer’s loss of water, the produce has to be imported from where water for farming is still available. This could be overseas. This situation presents a dilemma for those economists who advocate letting ‘the market’ determine the allocation of water. These economists do not bat an eye if foreign speculators purchase rights to water. Their faith in a perfect market is such that no other method of allocation is preferable. What we can call ‘theoretical purity’ and myopia defeat rationality, but too many modern economists don’t comprehend this. They are trained to believe that we should not interfere in economic decisions, that the self-interest of consumers and producers will provide the best result. The evidence is overwhelming that this is not the case when we consider the future consequences of today’s decisions. We have a faulty telescope.

Geography again Climate, which goes hand in hand with geography, is yet another factor that influences our task of helping to feed the world. Where rainfall is reliable and spread across the year, rather than being distinctly seasonal, two crops of wheat, rice or other grain can be grown. This does not necessarily double the output, as rainfall and growing conditions are unlikely to be in exact proportion. However, significant increases in yield result and the economics of cultivation are affected favourably. We can, in the appropriate locations, dam and store water to be released to allow two crops per year. The benefit of this requires a case-by-case test, with a robust cost–benefit analysis as the starting point. Much more could be written about the effect of physical geography on food production, and we will fulfil that requirement when we come to

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discuss farming in Australia. Here we are giving attention to the global situation. It is extremely important to go beyond geography and recognise the role of human factors. To these we turn.

Institutional factors: a digression At first glance land reform in the poor countries might seem far removed from our task of analysing the prospect of Australian farmers to play a major role in feeding the world’s increasing population, but what needs to recognised is that it is in the poor countries where much suitable arable land and water exist. How it is used and for what purposes has an important bearing on global food production. If this land and water is in the hands of the multinational agribusinesses, the produce grown will be for the world market, and Australian consumers as well as Europeans and North Americans will be purchasing canned pineapple grown by a Philippines-based conglomerate rather than product from Yeppoon in central Queensland. Our farmers will be in competition with economic giants using cheap labour. To the extent that Australian farmers are in competition with agricultural producers in poor countries, it is with very large agribusiness firms rather than with local peasant farmers. The type of land reform the peasant farmers of these countries clamour for would, if achieved, result in a fundamental change. The big plantations would be broken up into family or village farms. The produce grown would meet family requirements before the surplus entered the cash economy, in particular the local markets and the nearby cities, and only after these consumers’ requirements were met would the remaining surplus be exported. If, and this is a most apprehensive if, significant changes in land ownership were to occur, Australian farmers could be competing on very different grounds in selling their surplus food into the global market. A far more equal ownership of land in the poor countries would, we expect, shift food production to local needs before overseas sales were considered. This would not be because indigenous small-scale farmers were necessarily good citizens; rather the local markets would be what they are familiar with, and producing for local consumers would not involve the sophisticated transactions costs that exports involve. It follows, if this theorising is correct, that across-the-board land reform would provide opportunities for Australian farmers. They would not be competing with the international agribusinesses that presently dominate large-scale agriculture in the poor countries. It was to make this point that we digressed. Who owns farming land in the developed countries matters little, notwithstanding the concerns some have about foreign ownership (see Box 3.1). However, land ownership is of real concern in the poor countries. If you own land, you determine what is grown on it – and, obviously, for whose benefit it is grown. Notwithstanding the fact that in the mature, developed countries land ownership is far from equal, the overall economic performance of the farming sector is not overly distorted by land ownership. Land ownership is a very significant example of economic power in a poor country. Only the power to command the national army is of greater political and economic importance. It is a sad fact that local food security is not a prime consideration in many poor countries until something dramatic happens. Riots in cities when food prices escalate are of political concern and, even if for no longer than the duration of the crisis, leaders pay attention and subsidise rice or another staple. Not that long ago, in the years 2005 to 2008, the world market price for rice, wheat and corn escalated by between 300 and 500%. Food

3 – The global food supply

riots were common in parts of Asia, Africa and the Middle East. A UN peacekeeper plus four local citizens died in the riots in Haiti. Addressing the means by which the poor could feed themselves is not a consideration in the great majority of the poor countries. Powerful political and economic elites do not allow any meddling with the status quo. There are a few exceptions where land reform is pursued, but these are controversial and conflict-ridden. If the very rich own great swathes of land (operated as plantations), the interests of the labouring poor and peasant farmers are not well served. At best, they might be employed as plantation workers on subsistence wages and ‘own’ a tiny plot (according to the World Bank (2011), in most of the undeveloped world plot sizes range from 1 ha to 2.4 ha). The products from the large industrialised farms are sold in foreign markets. These items include palm oil, tea, tobacco, and even flowers. Some are sold to the middle class in the major cities of the country in question. In both cases good profits can be made by the land-owners. Box 3.1 summarises a route rich nations can take if faced with a food crisis in their home countries. What is grown on the plantations is, in many cases, not suitable for feeding local people, and it is not grown with that objective in mind. Palm oil, tobacco, rubber and flowers crowd out basic foodstuffs. Some of the poorest nations in the world have agricultural enterprises which at the best provide very low-paid jobs and products destined for foreign markets. The plantations in South-East Asia and the South Pacific islands are examples. They are owned either by the fabulously rich of the country in question, such as in the Philippines, or by multinational firms such as Unilever. If we look further afield to Central America and roll back the clock a little we come across the very same situation. Revolutions occurred to rid poor nations of the powerful

Box 3.1: Based on: ‘Farmland is the new gold’ (Euromoney 2008, quoted in Michael T. Klare 2012, p. 186) Following the Global Financial Crisis of 2007–09 and the dramatic increase in food prices in some developing countries, leading to riots and making governments nervous, the media was near-saturated with stories of ‘land grabs’, or what some describe as another form of neo-colonisation. The land-rich parts of Africa got to feature in the stories and the neo-colonialists that were singled out were China and the land-poor Arabian states, Saudi Arabia and the other Gulf Cooperation Council monarchies. Leaving China aside, these other, mainly desert but oil-rich, countries are ruled by royal families, and fear of regime change from below cannot be dismissed. Feeding the hungry is a fundamental survival strategy. The French Revolution of 1789 is forever a reminder to an absolute ruler that the best protection from insurrection is a well-fed population. It is no wonder that the king of Saudi Arabia is funding the purchase of extensive farmland in Ethiopia. Sudan is another target for the Saudis. The situation in these countries is described thus: ‘guards with AK-47s protect … humidity-controlled greenhouses … watered by computerised irrigation systems … set in the middle of a country where farming is still conducted with sickles and ox-drawn ploughs and where millions suffer from chronic malnutrition’. A situation not too dissimilar to this led to the ‘hammer and the sickle’ bloody revolution in another peasant-farming country a century ago.

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multinational landowners, and these occurred in the past 50 to 60 years. Cuba and Fidel Castro come to mind immediately. The villain in that case was the United Fruit Co., a US conglomerate controlling the Cuban sugar industry. Go back in history two to three centuries and we are in an era when giant foreign companies were the de facto governments of poor countries. The Dutch East India Company was one. The British East India Company was another. While not in the same league, it is interesting to note – considering that we are writing about Australia – that the Australian Agricultural Company (to be discussed in Chapter 5) was established in 1824 by an Act of the British Parliament and given the right to select one million acres of land in Australia for its sole use.

The end of the digression This digression, though interesting, risks taking us far from the issues of the present. Suffice to say that the flowers grown on some foreign-owned estate in a poor country and sold by the florists of London and Paris give a few days pleasure to their purchaser, profits to the farm-owner, and meagre wages to the tillers of the soil and cutters of the flowers. The opportunity costs of using land, fertilisers, fuel and labour to grow flowers cannot go unremarked. Home gardens exist for the purpose of brightening up the day. In the cold countries there are window-boxes for growing flowers to cheer the residents and give momentary pleasure to the passer-by. The export of tobacco and flowers shows up in the national accounts of the exporting country. And that is viewed as a plus by conventional economic measures. Nevertheless one must ask if the local people are better (or possibly, worse) off for this.

New supply competitors Mindful that our goal is to look to the future and ascertain what role Australia can play in feeding (and clothing) the world, we must have an eye on the possibility of land reform in several developing countries where, if it took place, we could expect a different mix of agricultural products to be grown and a rearrangement of international trade patterns. This could result in Australia competing with these developing countries to sell the same farmed products in world markets. It is worth keeping in mind that many of Australia’s potential food-producing competitors are in the southern hemisphere and hence able to take advantage of global seasonality to the same extent as Australia. At the moment most of these countries are poor and inefficient agricultural producers, and many could benefit from land-ownership reform. What we are putting on the table here is the prospect of these countries making major strides forward and competing with us. The day could come when we might find ourselves competing with farmers in Sub-Saharan Africa to sell high-quality farm produce to China and elsewhere. At present the small-scale farmers of Sub-Saharan Africa suffer from a range of economic problems. Their farms are very small. They lack money and access to finance. Infrastructure such as silos, and machinery such as combine harvesters and tractors, are what economists call ‘lumpy’ investments, in that they require considerable savings or borrowed money. These are virtually impossible to acquire if you are dirt poor (an appropriate pun). In these countries a lack of formal education and training in technical skills hinders farmers in adopting modern farming methods. The diseconomies of small scale are exacerbated by the difficulty of acquiring finance as well as the lack of infrastructure to deliver produce to ports. We should welcome solutions to all these problems if we

3 – The global food supply

care about the dismal lives of the very poor farmers in Africa. However, we have a major role to play before there is any likelihood of progress in the poor countries. It would seem some time yet before the potential competition eventuates, and for a considerable period we will have opportunities to sell our quality farm production in world markets and cement trading relationships based on brand ‘Australia’. If and when we are forced to compete with Sub-Saharan Africa and to compete much more vigorously with various South American countries, we should have established a brand for our farmed produce that equates to the recognition the Swiss have for watches and chocolates, the Scandinavians for furniture and cheese, and the Germans for high-quality machinery. We already have that for Tasmanian cherries due to the fruit-fly-free farms in Tasmania, and we have had it a long time in fine Merino wool. We could establish brand Australia for all our exported farm products.8

The importance of farming The Australia of the future will have things to trade other than farmed products, such as education, health and engineering services, machinery associated with agriculture and food processing, and eco-tourism, but we must recognise that agriculture is going to be far more important than traditional manufacturing such as vehicle-building, something we have struggled for too long to make profitable. Our success in expanding the sale of farmed products is something to be proud of. However, as a nation we are far from recognising the importance of our agriculture and have utopian dreams of other futures (in manufacturing, finance, and becoming the next Silicon Valley). Undoubtedly, we will do small amounts of these type of things, and we are likely to do them well, but if we understand economics at all it will be recognised that in some agricultural pursuits we have an absolute advantage (monopoly supplier of superfine wool) and a comparative advantage in the export of a wide range of products. Why would we not play to our strengths? In the following chapter we present an overview of Australia’s potential contribution in feeding a growing and wealthier world food market. As explained above, we won’t be the only country seeking to make a difference! This will be a reoccurring part of our story.

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4

Australia’s role T. Hundloe

Introduction Australians face the challenge of fashioning their own sustainable economic future so that when the day comes that they can no longer ride on the iron and coal trains as they once rode on the sheep’s back they have a replacement (and hopefully sustainable) economic future. Today, agricultural exports play a significant role in supplementing our foreign exchange earnings from mining and tourism, our ‘big’ industries (the former in terms of dollars earned, the latter in terms of jobs created). Mining is not sustainable in the long term, but of course the long term could be a long time away if demand for coal does not abate and if the demand for iron ore and other minerals remains steady. These are the ‘big ifs’ that Australia faces, at time scales we can only guess at. When considering the future one is reminded of the farmer who in the 1850s initially joined the gold rush, only to discover that farming provided him with a far more reliable and sustainable future. Eric Dunlop and Walter Pike in their book Australia: Colony to Nation (1963, p. 195) quote the farmer: ‘People must eat and if I am not mistaken I shall make more by ploughing my fields than … digging for gold’. Tourism, in particular nature-based and eco-tourism, is, if we protect our tourist ‘icons’ and don’t oversell them or over-expose them so that they lose their allure, a sustainable money-earner. The secret of successful tourism is to have the visitor feel that he or she is an ‘explorer’, finding a place or an experience for the first time. This fundamental fact is not well recognised. It requires that natural places remain natural and not be ‘hardened’ by overly obvious infrastructure. A simple walking track can allow one to feel one is in a nearwilderness, while a hardened path feels of human intrusion. To snorkel or dive on the Great Barrier Reef provides a completely different feeling to viewing it from a semi-submersible boat. Hardening becomes necessary to safeguard nature when tourist numbers go beyond a certain point. Better to limit the numbers than to spoil the tourist experience. In Australia we presently rely on making foreign income from mining, inbound tourism, education and agriculture. The time will come when agriculture will be asked to make a far larger contribution to our economic wellbeing. We should add the caveat: if this is possible. We must not view an agriculture-dominated economy as a banana republic. Bananas are the last thing we are likely to sell overseas. Our large range of farm produce 53

54

Australia’s Role in Feeding the World

means that we have many eggs in the export basket, and we are not in the same category as a real banana republic where one or two crops dominate export sales.

Not the food bowl of Asia, but still special We come to address the theme and purpose of the book directly: what is Australia’s role, if any, in helping to feed the world of the future? There are those who assert without any real thought, certainly without doing the essential analysis, that we will be, or can be, (if we do as they say) ‘the food bowl of Asia’. They pick Asia because China is front and foremost in the mind of all Australians. They cannot help but know of its tremendous economic growth and the changing dietary demands of the very large Chinese middle class. These Chinese want Australian beef, dairy products, wines, and the best seafood. This is true. That Australia is going to feed Asia is nonsense. We will do our bit, but how much and what that is we need to clarify. Given that today we export significant quantities of foods (and fibres), we obviously have a large surplus to sell overseas, and thus to generate incomes for Australians, incomes which permit us to purchase motor vehicles, television sets, clothing, computers and much more, with China being the main source. The nation’s major exports in 2012–13 and the average for the combined years 2013–14 and 2014–15 are presented in Table 4.1. While in general there are not significant differences between the periods, for some products the changes are noteworthy. The vagaries of markets and nature cannot be escaped. Some of the categories are not equivalent. Can we produce more and export more? Of what products? How will we produce more? Will the increase in global demand raise prices to the extent that price increases will dominate supply increases, and hence we will be in a favourable position without doing much more than keep selling what we sell at present quantities? Keep in mind that we have competitor suppliers! Table 4.2 lists our current major competitors by product. There will be, potentially at least, other competitors in future, as explained in Chapter 3. Table 4.1.  Australia’s top 11 agricultural exports Product

2012–13

Average 2013–14 and 2014–15

Value ($ billion)a

Value ($ billion)b

Wheat

6.7

6.3

Beef

5.1

6.2 (beef plus veal)

Cotton

2.7

2.1

Wool

2.5

2.9

Rape and canola seeds

2.1

1.7

Wine

1.9

1.8

Lamb and mutton

1.6

1.4 (lamb)

Sugar

1.5

1.4

Barley

1.3

1.8

Milk and cream

1.0

2.0 (powdered milks and cheese)

Seafood

1.0

0.8 (only rock lobster)

Live cattle

na

0.8

Australian Government Department of Foreign Affairs and Trade (2013) b ABARES (2014) a

4 – Australia’s role

Table 4.2.  Australia’s export competitors Country/Union

Product

New Zealand

Dairy, sheep meat

European Union

Beef, dairy, wheat, sugar

Brazil

Beef, sugar

United States

Beef, wheat

Eastern Europe

Dairy, wheat

Thailand

Sugar

China is today our number one export market (all goods and services included) and our number one import market. Go back to the recent past and Japan played that role. Before that it was the United Kingdom. Economic sustainability is not about ‘rusted-on’ trade relationships: it is about flexibility, evolution and sustaining per capita incomes and wellbeing in an ever-changing world. If we had stayed with the United Kingdom as our major trading partner we would be a very poor country today. As already indicated, for some considerable time China will be the major growth market for Australian farmers. Nevertheless, we will need to be mindful that China itself is capable of becoming a major agricultural nation, if it is not so already. It is already the world’s number one producer of fruits and vegetables, with 20% of the globe’s fruit and 50% of the globe’s vegetables. There are media reports of massive cattle feedlots with associated slaughterhouses under construction in China. Yet we should not be overly impressed with these facts. Here is another fact. In 2008, China became a net importer of food. Come to the present, and it is the world’s largest food importer. In 2014, it scrapped its policy of grain self-sufficiency. China has to feed approaching one-fifth of the world’s population with about 7% of its arable land. While it has made giant strides in reducing hunger since 1990, reducing it by half since 1995, the country’s natural resource base is very limited. Of passing interest is that while we sell food to China we also import foodstuff from China; certainly not a great deal, but it is in our shops. The best example is Chinesegrown garlic that sells at near one-tenth the price of locally grown garlic. Here we have a high value-for-weight product that is not perishable in the short term, and these factors mitigate the transport costs. Australia also imports a wide variety of processed foods from China. An indication of the type and range is presented in Table 4.3. This is getting ahead of the story. We will come to see that Australia actually has an important role in the global scheme of food and fibre production in a future world of 9.7 billion people, but the extent of that role and the nature of the agriculture that will be involved depends on some crucial factors that tend to be ignored. We will deal with the constraints and possible obstacles in some detail, because unless we fully comprehend their strength and potential impact we could make some very costly economic and environmental mistakes. On the other hand, if we Table 4.3.  Examples of packaged food imported to Australia from China 1 kg carrots, cauliflower, broccoli and beans

$5

500 g frozen blueberries

$3.99

1 kg pumpkin seeds

$18.90

Source: Courier-Mail, 21 February 2015.

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Australia’s Role in Feeding the World

overplay the constraints on Australian agriculture, we could forgo much in foreign exchange and the general wellbeing of the Australian people.

The new challenge We face one of the most important challenges ever to confront this country. We are not thinking about what will replace mining. We don’t believe that our large profits from mining could be short-lived. We are myopic to a very large degree. This must change. We need a plan. The workings of ‘the market’ will not guarantee our future. As a nation we are very good at producing agricultural products. On this we must capitalise. We need to determine if and how we can increase our agricultural output. Price increases resulting from global under-supply will be of a benefit for a while, but are not likely to last. Other countries with the available land and water are as keen as we are to benefit from expanding markets. Should we spend vast amounts of money on new irrigation projects? Should we ensure that no more farmland is lost to urbanisation? By what means, incentives or subsidies, should we get farmers to improve – and significantly – their water efficiency? How can we reduce reliance on fertilisers – how can we stop wasting them and in the process reduce downstream pollution, keeping in mind that waste inflates the cost of farming? Reducing use of water and fertilisers is a genuine ‘win–win’ solution. Are we paying enough attention to the possibility, maybe probability, of major shifts in consumer preferences? We talk a lot about our ‘clean green’ image. Could we not expand that thinking, and marketing, to our vast organic natural pastures? If you don’t recognise these as challenges and opportunities, you are unlikely to subscribe to our thesis that agriculture has the potential to keep Australia a rich and highly developed country.

Australia’s productive endowments When economists are given the task of identifying economic success, they will first seek out what they call ‘factor endowments’. Australia has been blessed with the following four natural factor endowments: minerals, considerable areas of good soil (although these make up only a small proportion of what is a very large country), good coastal rainfall, and world-class eco-tourism destinations such as the Great Barrier Reef. Add to these our ‘manufactured’ factors, in particular a highly educated and technically skilled workforce, and we are the ‘lucky land’. We only had to make the last ingredient (that is, put in place a good education system); nature did the rest. Most challenges that the Australian people faced in the past took little thought. All we had to do was react to foreign demand for our natural resources. There was little hard thinking required when a decade or so ago the Chinese came seeking to purchase our iron ore. Go back to the gold rush days of the mid-19th century and we found it easy to make money by meeting the world’s demand for precious metals. Nothing much to think about here other than sort out mining tenement law before there was a revolution on the gold fields. Wool was a winner from the earliest days as ‘Mother Britain’ took as much as we produced. Of course, wool was not a nature-given resource. What was nature-given was the vast plains, the best with thigh-high Mitchell grass after the rains. These allowed us to graze (at the peak) between 10 to 40 times more sheep than the human population. Through experimentation and selective breeding we developed the Australian merino and the rest became history.

4 – Australia’s role

Over the years other countries came to our gate as Britain dropped out of the race. When Japan and the so-called ‘Asian Tigers’ commenced their strong industrialisation phase in the 1970s we again had little to think about other than how to extract and transport the resources for which they were willing to pay good money. We were, and still are for the moment, blessed with enormous amounts of underground resources. As a most basic digression, on a per capita basis these resources are worth much more now at a population of 23 million than at a population of 35 million, which we are likely to have in 2050. Today we share the royalties and rents with 12 million fewer people than it is planned that we will have in 2050. Today’s population has to be wealthier, all other things being equal, than the much larger population in 2050. This is a simple mathematical reality that not all understand. There is a tendency to think and make calculations in aggregate terms. A country with 100 million people earning on average $10 000 per annum from exports has an aggregate annual export income of $1 trillion, while a country with a population of 25 million earning an average $40 000 per annum from exports has an aggregate annual export income of $1 trillion. Which one would you rather live in? The further into the future we look, the more it is going to be different. Those who think and care about our future tell us that we have to plan for a post-mineral/coal/gas boom. What do we do as a nation when that day comes? What do we do now to make this transition smooth?

While time is still on our side As a very relevant aside, it pays to be reminded of that insight attributed to a MiddleEastern oil sheik: ‘the stone age ended not because we ran out of rocks’. Whether through serious concerns about the effects of climate change, localised atmospheric pollution (as in the industrialised cities of China) or a change in the relative costs of alternative fuels, coal and natural gas-based energy production could cease well before the seams are empty. Hence, we need to think about, and plan for, the replacement of these energy sources while time is on our side. How much time we don’t know. We might feel more secure with regard to the future of the ores than we do for coal, because unlike coal at some future stage the ores do not have close substitutes. Minerals such as iron ore can be expected to be in demand until the day they become so costly to acquire that recycling steel trumps mining iron and processing it. The same applies to other valuable metals. We expect the first ounce of gold mined is still in circulation, and if we stopped mining gold now all the gold in circulation would remain so. Precious stuff is like that. So what do we do to maintain our standard of living? Here we are asking that most basic question, one not heard much in Australia: what should we do with the profits and resource rents earned from our present resource boom? Due to these earnings, Australia is presently in the top ten rich countries, based on per capita income. We sit at number two, just below another resource-rich country, Norway, in the United Nations Human Development Index. Norway aims to remain rich by judicious investment of its profits and rents from its sale of oil. The Norwegian people retain the majority share of their natural endowment of oil. Their government takes the view that if you win the lottery you don’t give the winnings to some already wealthy multinational company. We are yet to take the future seriously and have not created a sovereign wealth fund that gathers and invests our mining surplus. This suggests that we are taking it as granted that we will wake up before it is too late and address that small matter. In that context we

57

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ask: what are our likely foreign exchange winners in the future? We are engaged in risky behaviour from an economic perspective. Much better to be investing now for the future. In the following chapters, we are going to evaluate the role of agriculture in this context; however, before that we should mention that Australia is well placed to sell to the world some other products. The food basket should not be our single saviour.

Not simply a ‘banana republic’ One of our other foreign exchange earners is presently our major employer. It is tourism, and in particular nature-based and eco-tourism. This is one reason why protecting the ecological health of the Great Barrier Reef is so important. This icon takes no selling. US President Barack Obama, on his visit to Brisbane in November 2014 to participate in the G20 meeting, made clear his desire to see climate change addressed so that 50 years hence his grandchildren could view the underwater beauty of the Great Barrier Reef. Because it was the US President saying this, the world took notice and, fortunately, so did Australian politicians. We await to see the impact of their endeavours. Several of our other areas of natural beauty do need more promotion to foreign tourists as well as continued protection from degradation: areas such as the Wet Tropics (commonly thought of as ‘the Daintree’), the Gondwana Rainforests (another World Heritage Area), the Northern Territory World Heritage sites Uluru and Kakadu, the WA ones of Ningaloo and Shark Bay, South-West Tasmania, and several others. Spoil any of these and Australia’s ‘green and clean’ brand becomes tarnished and diminished in economic value, not only to the tourism industry but more generally. Our agriculture would be the biggest loser if we lost our brand by degrading our natural tourism drawcards. It is a universal brand, germane to all things Australian. Tertiary education is another of the country’s export success stories. In certain fields we are among the world’s best: medicine and the para-medical disciplines, engineering, agriculture and the environmental disciplines. It is recognised that as a rich country our exchange rate makes both tourism and education relatively expensive. There is nothing we can do about that given a floating exchange rate, other than provide top-quality experiences and, in the case of education, make serious efforts to substantially reduce the administrative (overhead) costs of tertiary education. Australian academics, many of international standing, are not paid a great deal. Various tradespeople with little more than a high school education earn more in the mining industry. It is the number of administrative and management staff in universities that dramatically inflate the cost of a university degree. Selfimposed ‘red tape’, much of it the making of university administrations not government, is retarding our competitiveness by keeping student fees high for foreign students.

Australian agriculture to the rescue: an introduction to the issues Australia developed as an agricultural nation. Until the 1960s, the phrase ‘Australia rides on the sheep’s back’ was the conventional wisdom. Every primary school student knew the saying; knew when, why and how Australia obtained the best merino sheep in the world. The slogan translated into the fact that we made most of our export income from providing the best wool in the world. In the period of, and just after, the Korean War in the early 1950s, wool sold for ‘a pound a pound’. Go back to the 1880s and 1890s (before the depression that occurred in that decade) and Australia was the richest country in the

4 – Australia’s role

Fig. 4.1.  Sarah Blagrove on a tractor.

world on a per capita basis. This success was founded on three exports: wool, wheat and gold. With the introduction of refrigerated shipping in the 1880s, dairy products and meat supplemented our foreign earnings. Our economic success in this period attests to the fact that an efficient agricultural country can succeed without relying on home-grown manufacturing. However, as a consequence of being a farming nation, we became very good in the manufacture of farm implements and machinery and innovative in long-distant transport. What primary school pupil has not been told of the invention of the ‘stump-jump’ plough? One does not need to describe the plough; its name is self-explanatory. The ‘jump’ principle was subsequentially applied to other implements dragged across rough, stump-strewn paddocks that were to be ploughed, tilled and harvested. Next a farm implement called a ‘scrub roller’ was invented, again a descriptive name. By 1884, H.V. McKay had put together a stripper (of ears of grain) and a winnowing machine to make a ‘combine harvester’. The first of a long list of agricultural inventions started in 1843 when John Ridley demonstrated his grain ‘stripper’ on wheat. Clearing the mallee eucalyptus country of the Yorke Peninsula in South Australia to grow wheat was the catalyst for inventing the stumpjump plough. Since the formation of CSIR, to become CSIRO in 1926, many of Australia’s agricultural inventions have come from its laboratories and field experiments. This is not to overlook the work of the private sector where two examples will have to suffice: the invention of the rotary hoe and the cane harvester. Visit any broad-acre farm and see the massive harvesters, cultivators and tractors. Not all farm machinery is gigantic. Sarah

59

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Australia’s Role in Feeding the World

Table 4.4.  Land use in Australia Land use Nature conservation

Area (sq. km) 569 240

Percentage of land area 7.41

Other protected areas including Indigenous users

1 015 359

13.21

Minimal use

1 242 715

16.17

Grazing natural vegetation

3 558 785

46.30

114 314

1.49

23 929

0.31

Production forestry Plantation forestry Grazing modified pastures

720 182

9.37

Dryland cropping

255 524

3.32

1092

0.01

Irrigated pastures

10 011

0.13

Irrigated cropping

12 863

0.17

3954

0.05

Dryland horticulture

Irrigated horticulture Intensive animal and plant production

3329

0.04

16 822

0.22

Rural residential

9491

0.12

Waste and mining

1676

0.02

Intensive uses (mainly urban)

Water No data Total

125 618

1.63

2243

0.03

7 687 147

100.00

Source: ABARES (2010).

Blagrove, like most country kids, learned to drive a small tractor at an early age. In Fig. 4.1 she is a teenager in charge of her tractor. To this day, the field in which Australia retains a strong manufacturing base is in food and beverage processing. So here is yet another paradox. Australia has made numerous attempts, especially in the motor vehicle industry, to become a serious manufacturing country, only to fail, yet our manufacturing industry focused on the exploitation of our natural endowments has been very successful. We probably do not do enough to promote and sell these products overseas. Today, Australia is known for its high-quality foods and fibres (wool is still there but playing a much diminished role as global demand is no longer as strong; cotton has been added). It is not just quality but reliability of supply that gives strength to our brand. Reliability is a major challenge given the propensity for droughts (some extending for years), floods and,in the northern horticultural areas, cyclones. We are, in most times, able to meet the reliability challenge because it is unlikely that, for example, all wheat-growing areas will be under drought at the same time; they stretch in a great arc from Queensland to Western Australia, through many climate zones. The size of Australia, notwithstanding much of it is desert, is an undeniable advantage. Here is the perspective: all of Europe, excluding Russia and the Ukraine, could be fitted into Australia, twice! And yet another perspective: if we subtracted arid and semi-arid land, Australia is reduced to about onefifth its actual size. Table 4.4 presents data on land uses in Australia. If we combine the categories ‘minimal use’, ‘grazing natural vegetation’ and ‘Indigenous use’ we have in the order of three-quarters of the nation: here is another index of our quite small area of reasonable quality land.

4 – Australia’s role

The dispersed geography of most of our main agricultural areas plays to our strengths. Beef cattle and sheep are grazed in every state and a wide range of environments, from irrigated pastures to deserts. Dairy farming, although concentrated in Victoria, reaches into the far north of Queensland. Exported fruits such as the citrus varieties are grown in numerous areas across the continent. So are grapes, potatoes and various vegetables.

Our products, their value and agricultural productivity Australia is without question a world leader in agricultural productivity. The best indicator of this is the fact that only in the order of 3% of the country’s population is employed in agriculture, fisheries and forestry workers included. Australia’s farm productivity is very high. Not only is what economists call ‘total factor productivity’ high, our yield gaps are quite small. This means that it will be very difficult to increase yields. The downside of being very efficient is that any additional productivity gains will be hard to come by. The closer our farmers get to reaching the best achievable productivity, the more they push against diminishing marginal returns or decreasing marginal productivity. Note that economists think of labour and capital (machinery) as well as natural resources as factors of production and to relate these to the dollar value of products. As all factors (inputs to farming) combine in total factor productivity, it is very difficult to separate the effect of adding or subtracting individual inputs. Add more water: what is the impact on plant growth? This is likely to have a crop-by-crop or farm-by-farm answer. In measuring productivity, we must never forget that farmers have to do their best in vastly different environments. When making measurements we tend to overlook the selective productivity of soils and the availability of water. The semi-arid land of the Nullarbor Plain has far fewer sheep per hectare than the green, well-watered hills of New England in northern New South Wales. There are no prizes for guessing the reason for the latter area’s name. However, running one sheep per hectare on semi-arid country is as viable as five per hectare on good country. This is due to the vastly different cost of the land. A meaningful measure of productivity is the value gained by investing an extra dollar (let us, say $100 000). Thought of in these terms, productivity is akin to profit. This is a more appropriate approach to measuring productivity than the common view of low productivity in terms of workers not working hard enough. Water is a major, some would argue the most important, factor in the determination of productivity. Yet again it is water plus: plus soils, plus the selection of the appropriate breed for the climate, or crop for the season, and workers for the job.

Domestic consumption versus foreign earnings We produce enough food to feed more than twice our population of 23 million, in fact ~60 million people (Commonwealth of Australia 2015). At present, Australia exports over 60% of its agricultural output, with a major focus on Asian markets. For some products the export percentage is 100%, or close to it. Our fibres, wool and cotton, are in this category. Of course, we can only export the quantity that is not consumed at home. The more of us there are, the less surplus to export. Given finite resources to work with (good soil and rainfall), the more of us there are the less wealthy we are on average. If Australian governments continue with a strong immigration program, as seems likely, it is estimated that the country’s population will be 35 million in 2050. This 50% increase in mouths to feed and bodies to clothe will require a proportional increase in Australian farm products, a fair proportion of it devoted solely to domestic consumption if we

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are to maintain a constant level of per capita income from exports. In making this point, we are not overlooking the fact that we should be able to meet increased demand for food by importing products, assuming we sell enough overseas to be able to afford the increased domestic demand for imports. It is unlikely that we will be selling more food products given the need to feed many more Australians. The issue is not one of self-sufficiency. It is about producing more than we consume at home of whatever (note the ‘whatever’) items so that we can earn foreign income to facilitate imports of whatever products. Only by the export of surplus production are we able to remain wealthy and import goods. The surplus production does not need to be surplus food; we can continue to export minerals and gas as long as the demand is there; we can sell eco-tourism experiences to foreigners (foreigners visiting the Great Barrier Reef are ‘consuming’ our ‘surplus’ natural environment); we can sell skills and knowledge to overseas students. It follows that unless there are economic gains from immigration (that is, improved total factor productivity) the nation will be worse off if we set about to increase our numbers. We understand that this is a contested statement and we will revise it if the empirical evidence shows that that is necessary. Complicating our consideration of future demand for our foodstuffs is the possibility of significant changes in the nature of the demand. While we can expect changes in diet (obvious trends at present are an increase in per capita consumption of seafood and freerange eggs), it is unlikely that significant changes in Australians’ food consumption profile will occur rapidly. It seems uncontroversial to claim that we will need to increase egg production to meet the enlarged population, but ‘guesstimating’ the rate of shift to free-range or organic eggs is another matter. That aside, the end result of the predicted population increase to 35 million is that we will have less surplus farm production to export unless we work out how to produce much more. This raises an interesting philosophical problem. Presently we feed 23 million Australians plus 37 million overseas. If we assume no increase in agricultural output, in the future we will feed 35 million Australians plus 25 million overseas, and we will have less per capita foreign income from agriculture as a consequence. We would be dividing the same dollar value of farm exports by a larger number of Australians.

The supply side: opportunity costs and externalities We ask basic supply-side questions, the answers to which will determine how much more we might be able to grow and therefore export. First, have we unexploited agricultural land plus the water that will need to go with it? What of the competing land uses? What are the opportunity costs, that is, the value of land in different uses? This is one set of basic questions we need to answer. The second set of questions pertains to the unintended consequences of much modern farming. Some types of farming have no off-site or downstream impacts; others do. Economists call these unintended impacts ‘externalities’, on the basis that what occurs off-farm is external or of no direct consequence to the farmer that causes them. If some industry downstream, say a commercial fishery, suffers a loss of income due to polluted water, the person causing the pollution does not pay for that loss. There are several externalities associated with farming in Australia, some serious as measured in losses of flora and fauna; some such as increased salinity impacting on the long-term viability of agriculture. If land presently in its natural or near-natural state is to

4 – Australia’s role

be converted into fields and paddocks and if rivers and natural water flows are to be impounded to provide irrigation, we will have to ensure the mistakes of the past are not repeated. This is likely to require different cropping methods from those conventionally used in the past. For example, it is likely to require more capital intensive, on-farm irrigation such as drips targeting roots rather than simply flooding the paddock and carrying away excess chemicals and fine-grain sediment. Managing the quantities of fertilisers applied so to eliminate waste and run-off can go hand-in-hand with drip irrigation. Can we increase agricultural output by smarter, more technically and economically efficient practices on our existing farm land? Maybe we cannot increase it because it is already at the limits of the existing ‘production possibility frontier’, as is the case with much Australian agriculture. This is simply the way economists point out that we are doing the best we can using existing technology and know-how. Nevertheless we need to ask, can we not reduce costs by seeking efficiencies that also eliminate externalities? We don’t have to rely on existing agricultural technologies. What is new that we can roll out across a particular type of farming that is resource-saving, pollution-reducing technology? In this context, we can ask: would it be both technically and economically efficient to require all irrigated sugar-cane growing adjacent to the Great Barrier Reef to be fed by drip irrigation? We know without doing any more research that water use is capable of significant improvement; drip irrigation is more efficient than spray (central pivot or linear/lateral) irrigation, and spray is more efficient than flow (surface or flood) irrigation. However, increased efficiency comes at a capital cost, and that is why most irrigation in Australia, except for high-value horticulture, is presently surface irrigation. A move to drip irrigation where it is feasible is what we can term a ‘big ticket item’, otherwise a priority. The challenge will be to find a fair and feasible way of paying for its installation, given the benefits accrue to non-farmers such as the Great Barrier Reef tourism industry. Will the selling price of irrigated products increase to the extent that farmers can invest in water efficiency? The answer is likely to differ from region to region and crop to crop, depending on geography, climate and soils and the crop in question. We have to start immediately doing the research and the sums. Depending on the answers, we need to be willing and able to make radical changes. We might have to spend a considerable amount of public money subsidising the installation of advanced irrigation technologies. Why would we do this? If the damage off-farm (to the Great Barrier Reef) was severe, we might think this expenditure worthwhile. We need to put ideas like this into perspective. As we write we hear much about proposals to spend very large amounts of money on new, large dams and conventional irrigation projects. Economists would ask: would there be greater benefits spending that amount of money on subsidising drip irrigation? The Australian taxpayers have subsidised large-scale irrigation projects for a very long time. Not all these projects have delivered on their promises. We will discuss this matter in some detail below. Only recently has this practice of tax-payer-funded irrigation stopped, or been modified so that the user of the water pays something towards its provision. There is a serious question in play here: if the next generation of agriculture requires costly investment in the provision of irrigation, what, if anything, would justify an element of public financial support? This is a key issue for those who promote the ‘development of the north’. Economists have a propensity to condemn subsidies. The argument goes as follows: are not all subsidies, unless they are correcting a failure in the market, distorting the market and not to be contemplated? Are they not a tax on all and a benefit to some? However, there is another way of looking at subsidies or, more broadly, public provision of infrastructure.

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Think of publicly funded railways, beef roads, and hydro-cum-irrigation projects like the Snowy River Scheme. These public investments enabled the development of industries that might never have developed, or developed to the extent they are today. It is a given that the railways opened up the ‘west’ (in the United States, Australia and numerous other countries); that the construction of beef roads for cattle transport allowed for the significant scaling-up of Australia’s beef industry; and without the Snowy River irrigation the relatively high-value horticulture in the Murray and Murrumbidgee irrigation areas would not exist. It is difficult to convince oneself that these infrastructure projects would have found private sector investors. In North America as witnessed in the era of expansion (generally the 1800s) there were enough rich and politically powerful barons to do what we, with our small population and limited financial strength, could not do. In Australia, governments had to provide the enabling infrastructure. To argue the case for government provision of infrastructure is not to condone wasteful public expenditure. We will come to discuss wasted infrastructure funding below.

Waste There is a significant waste of food in Australia and, we can note, throughout the rich world. This is a matter that, if addressed, would lead to a substantial increase in food available for consumption without any additional effort, and it would benefit farmers. Waste can occur on the farm during harvest, in processing, in transport and storage, and in the home and restaurants. Address this and large additions are made to the available food supply. If waste is reduced on the farm, not only is there much more food to sell but a lot less diesel, electricity, water and labour used per kilogram of produce sold. Resources are wasted if there is less saleable product because it is being dumped on the farm, deemed unsaleable. Deeming produce unsaleable is the problem. This is explained in some detail in Chapter 11. Another form of waste also requires attention. It is the loss of valuable by-products that could be sold to consumers or, if that is not an option, used within the farm or food-processing sector. To make the point let us note examples of stuff that is not wasted by being put to productive use. We save money by recognising that some so-called ‘wastes’ are simply not that. A good examples is the utilisation of bagasse, the fibrous residue from sugar-cane, to provide fuel for the sugar mills. We have discovered in recent times that a range of seafood that was once tossed overboard is now a valuable product in the fresh seafood market and restaurants. All sorts of seafood are brought up in trawling for prawns. Not that long ago all except the prawns were discarded. One of these so-called ‘by-products’ is the Moreton Bay bug. Moreton Bay bugs are now delicacies to be served to visiting presidents and prime ministers (see Chapter 2). The words ‘waste’ and ‘by-product’ are losing their original meaning of something to be discarded. And so they should. In our quest to feed the increasing population of humans in a world of limited resources, eliminating waste should be the point of commencement. For those who like modern economic jargon, eliminating waste is ‘picking low-hanging fruit’.

Some facts and figures Overall, we could expect that if Australia is to increase its agricultural output, both onfarm efficiencies and bringing unfarmed land into production will be needed, while not

4 – Australia’s role

neglecting the matter of waste. These are the three most basic issues that we explore and provide answers to in the chapters that follow. Before that we need to understand Australia as an agricultural nation: what we farm, where we farm it, and what happens to the product. To the relevant facts and figures we turn.

Land uses If one were to ask what is the dominant land use in Australia, the reply would be grazing. The numbers of animals involved are large: in the order of 74 to 75 million sheep, 26 to 27 million beef cattle and approaching 3 million dairy cattle.9 These numbers do not necessarily mean that grazing is our most valuable agricultural industry, although it can be in those years when beef cattle sales out-compete wheat sales. As we will come to discuss, much of our grazing land is in its natural state, natural in the sense that there are no introduced grasses and no fertilisers sprayed over the land. With such a large amount of grazing land it is not surprising that the beef industry is one of the two major agricultural industries in Australia, up there with wheat. If we go back to 1970 or thereabouts, much more of this grazing land ran merino sheep than it does today, producing the highest quality fine wool in the world. Obviously, it carried fewer cattle then than it does today; the sheep flocks were dramatically reduced from then on. Australia is blessed with land that can be switched from cattle to sheep with only a small cost to the grazier. If the property has no history of running sheep, the only cost will be the construction of a shearing shed, shearers’ quarters and holding pens. As we write, Australia’s export of beef outstrips wheat by a large margin, at approximately $9 billion for beef and veal and over $1 billion for live animals. The grazing of beef cattle is widespread across Australia, but much beef country has a low stocking rate. The nation’s most numerous farm animals are sheep, with most being merinos. The sheep herd is presently 74–75 million. It has been more than twice as high. Much of what was sheep country is now beef country, and much of what was ‘sheep-and-wheat’ country, relatively good arable land suited for broad-acre crops as much as for wool and lamb/ mutton production, is now under crops (such as sorghum, wheat, barley, cotton). In terms of meat (mutton and lamb), the annual slaughter of 23 million animals produces export sales worth $1.6 billion annually. The wool export cheque was $2.9 million in 2012–13. As virtually all wool is exported, this equates close to the total production in Australia for that year. Moving on from grazing, Australia is a significant global producer of broad-acre crops, wheat, barley and sorghum. Wheat dominates. Australia produces in the order of 24–25 million tonnes of this grain annually. This is in favourable seasons. Australians are only too aware of the vagaries of nature. Wheat output is dependent on rain from Easter to November. There are both winter and summer crops. In terms of exports, Australia earned just under $7 billion from wheat exports in 2013–14. While the other grains are minor in comparison, they are significant in terms of export sales and as feed grains for domestic livestock and poultry. Barley is grown for feeding livestock and producing malt. An average of 4.5 million ha are planted annually, and this results in just over 8 million tonnes. Exports were worth $2.2 billion 2013–14 but dropped back to $1.3 billion in 2014–15. Sorghum, as a grain crop mainly used for livestock food, is the second-highest coarse grain grown in Australia, at just over 2 million tonnes in 2010– 11. Sorghum is exported to China to make alcohol. Some is used for bio-fuel production (at Dalby in Queensland). If the bio-fuel industry grows as we expect it to, more sorghum fields are likely to be planted to provide feedstock.

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In terms of relatively high-value products, growing sugar-cane stands out. In 2010–11, 300 000 ha of sugar-cane were planted. From this 3.6 million tonnes of sugar were produced. As sugar is a tropical or subtropical crop, there is no surprise in reporting that 95% is grown in Queensland. Bulk raw sugar is a major export. The longest jetty in the southern hemisphere has been built at Lucinda, in north Queensland, to allow bulk sugar vessels access in the shallow waters of the Great Barrier Reef. Wine grapes are the major horticultural crop, with ~1.5 billion tonnes grown in 2013– 14. A considerable amount of wine produced from these grapes is exported. In 2010–11 the value of exports was $1.8 billion. Production of table grapes doubled from 1998 to 2009 to become Australia’s largest horticultural export in 2009. Approximately 45% of table grapes are exported, mainly to south-east Asia, the Middle East and New Zealand.

To whom do we export? It makes sense that Asia has replaced Europe as Australia’s major agricultural export market. The European population is close to stagnant in numbers and income. This means that Engel’s law has set in: any increase in income will result in nothing more than small increases in the purchase of foods. On the other hand, the Asian population is growing (in some countries, significantly). In China, in particular, incomes for the ever-increasing middle class are rising rapidly, and there is some time yet before Engel’s law has an impact. Table 4.5 lists regions/countries that import Australian agricultural exports measured in monetary terms but expressed as percentages.

The dream of opening up the north Few have been the Australian federal politicians who have not, at least once in their parliamentary career, lamented the fact that ‘the north’ of the nation has remained virtually undeveloped, and gone on to express publicly that if only the rest of his/her fellow lawmakers would listen Australia would be twice as rich and, not to overlook the other reason for the north’s development, secure from foreign invasion. Some of these politicians would have been encouraged by ever-too-eager entrepreneurs. There just have to be abundant resources in ‘the north’ waiting to be turned into bountiful profits if only the government Table 4.5.  Destinations of Australia’s agricultural exports Region

Percentage of Australia’s exports

China

20

South-East Asia

18

Republic of Korea and South Asia

12

Japan

11

Middle East

10

European Union

7

United States

6

New Zealand

4

Africa

3

Other

9

Total

100

Source: Based on ABARES (2014).

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would spend some money on building dams, roads and ports! Yes, taxpayers’ money. The economists in the nation’s Treasury Department are not overly excited by this prospect. If there is one issue which is guaranteed to divide politicians from the economic ‘technocrats’ who advise them, it is subsidising ‘northern development’. As we will come to see there are multiple reasons why ‘the north’ is very sparsely populated and, mining aside, industry such as agriculture is limited. But first it is important to understand the strong interest in developing ‘the north’ and not to overlook the matter of where, in geographical terms, ‘the north’ is. We discover ‘the north’ is not one place, making the political arguments for ‘its’ development more difficult to understand. For some ‘the north’ is land beyond the Tropic of Capricorn, a vast area of the Australian continent. Others, more realistically, draw a line west from north of Townsville, a considerably smaller area of the nation. It is necessary to seek clarification of boundaries of ‘the north’ in any discussion of its future. Otherwise the discussion is likely to end in confusion before the crucial matters can be dealt with.

The Ord Early in the Second World War a Royal Commission reported that there was in the order of 40 000 ha of land in the Kimberley region that could be irrigated for the purpose of agriculture. About this time, a serious drought, commencing in the mid-1930s, was having a significant effect on the Kimberley pastoral industry. However, nothing was going to be done during the Second World War, for sound defence reasons. Darwin was bombed. Unless northern Australia could be defended, expansion of industry could not be contemplated. There was the pessimistic prognosis that an invasion was imminent. And the argument became: why grow food to sustain an invading army? There was, and remains, great controversy as to whether there was a plan to surrender half of Australia, retreating behind a scorched-earth policy if there was a successful Japanese invasion. The line which was to be defended, assuming the plan did exist, was drawn across the continent at Brisbane, and hence it became known as the ‘Brisbane Line’. How large ‘the north’ in this case! Populating the north became the rallying cry of those who saw this as a means of defending Australia. One expects that the advocates of this policy had read little history of the First World War. Highly populated countries were easily overrun. The war over and Australian life returning to normal, there were still some years before work began on damming the Ord River. In 1960, a small dam known as the Diversion Dam was commissioned. It was completed in 1963 and officially opened by the then Prime Minister, Bob Menzies. Politicians love to open dams. On the opening of this small dam on the Ord River, cotton was planted. By 1973, 12 000 ha of land was under cotton. It was not to be a success, as pests took a toll and the farmers faced financial difficulties. Within a year cotton ceased to be grown on the Ord. In 1969, work commenced on the main dam. This was completed in 1971 with associated roads and other relevant infrastructure in place. By then Billy McMahon was Prime Minister, and he officially opened the dam in mid-1972. The big dam created the nation’s largest artificial lake by volume, Lake Argyle. The lake produced unintended economic and environmental benefits. It became a tourist destination and a Ramsar site due to the popularity of the wetlands for migratory birds. Over the succeeding years a large range of crops have been tried in the Ord River Irrigation Area, and a number have failed. As a consequence, it is extremely important to ask what lessons can be learned from this, Australia’s most adventurous and controversial dam-building in ‘the north’.

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Agricultural economist Bruce Davidson was to make the Ord River scheme a cause célèbre, not because of its success but because in his analysis it was a monumental failure. Davidson is best known by his books The Northern Myth (1965) and Australia Wet or Dry (1969). One brief sentence in the former sums up his assessment. On page 279 he wrote: ‘It would be cheaper to pay people to live in the area [the Kimberley region] and do nothing, than to subsidise farming in the region.’ Building the dam was the equivalent to very heavily subsiding farming. The idea of damming the Ord was condemned from the start. Davidson, with Susan Graham-Taylor, wrote Lessons from the Ord many years later (1982). The bottom line does not change. Davidson applied conventional cost–benefit analysis in arriving at his conclusions. This resulted in distant future benefits being highly discounted, in other words of much diminished monetary value. Whether or not standard economic analysis is helpful when assessing enabling technologies, particularly if the benefits are likely to occur in the distant future, is a matter that cries out for debate and, hopefully, resolution. In 2009, a team of CSIRO scientists and economists joined with two agricultural economists from the firm Econsearch to write a study called Irrigated Agriculture: Development Opportunities and Implications for Northern Australia (Webster et al. 2009). This analysis forms part of a more substantial research project known as the Northern Australia Land and Water Review. The economists subjected the Ord River scheme to a cost–benefit analysis covering the period 1958 to 1991. Be mindful that only a small area had been brought under cultivation by that stage. In cost–benefit terms, applying a zero discount rate to the year-in/year-out flow of costs (to build and operate the dam) and benefits in the form of farm income, the loss was $668.2 million. This is measured in 2009 dollars with inflation accounted for. This loss was borne by the Australian taxpayers. Ord River farmers (who were not paying for the dam infrastructure) had made an accumulated profit of $18.8 million over one-third of a century (Webster et al. 2009). No wonder politicians, if they have an eye to economics, are hesitant to build more dams in the north. Applying a zero discount rate is being extremely kind in the assessment of the scheme. The conventional cost–benefit approach is to use a positive discount rate (at the low end it could be the government bond rate) and subject the flow of income and the flow of costs to the procedure of discounting. One does not need to go into the mathematics to make the obvious point that a project which has the vast bulk of its costs upfront (the construction phase) and its benefits (incomes to farmers) occurring very slowly and not reaching a maximum until well into the future is bound to fail the test unless the benefits are substantial. A third of a century is a long time to wait, and wasted years if we measure them at the near two-thirds of a billion dollars loss. Yet, 1991 is not the end of the project. Nor is 2016. As we write, a major extension is mooted for the Ord River scheme. More recently, a significant degree of optimism has surfaced and been kept alive. Rose-coloured glasses are once again being put on. We know much more today than we did decades ago. Let us hope that those charged with the analysis are conservative in their assessment and willing to defend it when confronted.

Humpty Doo No discussion of northern dreams can omit Humpty Doo. As we shall come to understand, it was the source of jokes and an inspiration for youngsters to try their hand at poetry, if heavily reliant on someone else’s intellectual property. We are in an era where poetry made up a sizeable chunk of the English curriculum in Australian schools. Here are two examples from the Humpty Doo era recorded for posterity:

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‘Humpty Dumpty had a great fall, Humpty Doo went to the wall.’ Or this one which borrows from A. B. (Banjo) Paterson: ‘On the outer Barcoo magpie geese are few, At Humpty Doo magpie geese have rice to chew’. So what is this all about? First, the period: it’s the mid-1950s. Second, the place: it’s ‘a stretch of lush lowland carved into a thousand natural paddies and backwaters by the sinuous, many-channeled Aligator River’, according to the central character in this story, one Art Linkletter (1968, p. 19). Third, the characters: the just mentioned Art Linkletter, a relatively well-known American television presenter of the era; Harold Holt, who at the time was the Federal Treasurer; Deputy Prime Minister and leader of the Country Party John (Black Jack) McEwen; and Bill Gunn, a grazier who did not know rice from rye grass. Gunn’s qualifications (or lack of them) are important because he was put in charge of the rice-growing project on the advice of McEwen. Bill Gunn was a member of the political elite in the era and got important positions because that is what its members got. The story starts in 1954 with Harold Holt at a ‘stag dinner party’ (whatever that is) in Bel Air, southern California. Linkletter and others who were to come together in the Humpty Doo project were subjected to Holt’s hard sell on investing in Australia. Investing is probably the wrong word. Holt was giving away largish chunks of Australia. Holt tells the guests: We are a new country and prospects for our development are almost unlimited. Take the rich delta land … near Darwin … Here there are tens of thousands of acres of land that … could be made into a magnificent agricultural empire. Enough rice could be grown to supply most of the world’s granaries year in year out. The soils as rich as the fabled Nile Valley, but ten times greater in size (Linkletter 1968, p. 3). Holt was neither an agronomist nor a geographer, but he was the country’s Treasurer and the right-hand man of Prime Minister Bob Menzies, and he could give away land that was at the time under the national government’s control. That he did. A group of American actors and a banker, calling themselves the ‘Hollywood Pioneers’, were given a hundred thousand acres. The only price they had to pay was ‘develop it’. One might assume development meant roads, dams, cultivation, the construction of farm workers’ houses and much else. Reality was something rather different. Five acres of rice were grown in the first year (1955) and in the second year 10 acres were planted, not quite the amount that Linkletter had in mind. He tells us that he said (p. 20): Cross my heart. We’re going to grow enough rice in these parts to feed the world. Linkletter saw himself and his friends as both humanitarians and profit-makers. Nature was to have none of this. Come the ‘Wet’ in the Northern Territory, and rivers like the Alligator become magnificent waterways with their banks the lushest green to be seen anywhere in the world. Overhead the sky will be filled with a black cloud of magpie geese one minute, then vacant as the birds settle for their monsoonal meals.

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Next imagine light planes overhead, dropping rice seeds to settle, germinate and grow to become the paddies to feed the world. Theory and practice have a propensity to diverge if the former gets too fanciful. No flight attendants were required to serve snacks to the ever-alert magpie geese. It was in-flight meal-time worthy of first-class flying. It was to be a very lucky seed to make it to the ground. There were to be no rice paddies. The Americans left. Australians were left scratching their heads and muttering about big-hatted Yankees with more boast than boost. However, Linkletter, writing in 1968, had not given up on the ‘Top End’. He wrote (p. 43): Everything is there; the conducive climate, the water, the soil, and the Asian marketplace. And one day, you mark my words, Humpty Doo will come into its own. He got the Asian marketplace right, although most of the trade was restricted to Japan in the era he is discussing and the protection afforded to Japanese rice farmers meant Australia had no hope of selling rice into the Japanese market. To close this chapter, let us focus on Asia in the present era, in particular China. Linkletter was well before his time and Humpty Doo was a misplaced dream promoted by the ever-too-keen advocates of ‘develop the north’.

The China dream If one country, other than our own, has had numerous mentions so far, it is China. As we write, the Australian and Chinese governments are negotiating to sign off on a so-called ‘free-trade agreement’. The term ‘free trade’ is much misused in the media. What we have between Australia and China is a bilateral trade agreement confined to several designated products, not all trade between the two countries. The Australian agricultural industries that are likely to benefit through increased trade are dairy, beef, lamb, seafood, wine, some grains, and horticultural products. In return Australia will phase out tariffs on clothing, textiles and electronics; as well, Chinese investment in Australia will be easier. And Chinese workers will be allowed into the country. The investment, in addition to generating profit, will give Chinese businesses access to Australian manufacturing technology. Food processing is an industry likely to be great interest to the Chinese. We are good at it. Whether or not Chinese workers will be welcome is a matter in dispute. We should note that excluded from the trade deal is the Australian export of wheat, sugar and rice. These are crops where the Chinese goal is self-sufficiency. Of even greater interest is that the Chinese long-term goal is self-sufficiency in beef. Chinese farms have much to learn from Australian farmers and food processers. The Chinese have found a means of achieving this with the so-called free-trade agreement, and earning money as a by-product. We must keep in mind that if China does become self-sufficient in producing our major export products, our opportunities to profit from the growing household income in China is limited to the few decades before Chinese self-sufficiency occurs. We must think that far ahead. And it is not only China that is programmed to self-sufficiency in food. Indonesia is in a hurry to achieve that. Whether or not self-sufficiency is achieved is for time to tell. Chinese economists are better versed in the theories of Adam Smith and David Ricardo than they are in those of Karl Marx. One could expect the benefits of comparative advantage to be fully explored – and implemented – before self-sufficiency became an economic burden with little hope of success. Self-sufficiency has an appeal to consum-

4 – Australia’s role

ers with nationalistic sentiments, but can come at a cost if imports are less expensive – and able to be paid for by exports. This chapter has given you a taste of what is to come when we discuss individual agricultural products in Section 4. But first a very brief discussion on trade in Chapter 5 helps to set the scene for the following chapters.

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5

Trade, foreign investment and comparative advantage T. Hundloe and J. Chiomey

Introduction A nation that produces at least 90% of the food its citizens consume can consider itself blessed with a wide range of natural resources suitable for agriculture (cultivated and grazed). Furthermore, it has built on this good fortune by developing the human skills that allow the production of so much food. Australia ranks 14 out of ~200 countries in the world as a net exporter of food. A big country, most of which is desert or at the best semiarid, with 0.3% of the planet’s population, indeed Australia is a lucky country with a continuing role to play as a global provider of agricultural products. Clean and green – and efficient – Australia will need to be skilful in managing its comparative and competitive advantages in agriculture because its rival exporters will have the same incentive to grow and export more food as world demand increases. Australia is at present the front-runner in terms of product quality, not only clean and green but also in ‘traceability’. This means that a consumer seeking certainty that the product is, say, grown organically has the ability to trace the product all the way back to the farm on which it grew. Traceability is an innovation in the agricultural business that favours Australian farmers. Domestic consumers, that is Australians going about their grocery shopping, are, in the main, keen to know where the product has come from. Labelling is becoming more common. This leads farmers to be proud of their brand.

Comparative advantage Another large country, Brazil, generates a much larger trade surplus than Australia. So does Argentina. The United States is ahead of Australia, although not by much. New Zealand, with its very small population and fertile farming land, just pips us. On the other side of the ledger, countries that have food trade deficits, we find Japan at number one with the largest deficit. Canadian environmentalist David Suzuki uses this fact to assert that the Japanese society is not sustainable. However, a large (even very large) ‘food footprint’ does not mean an unsustainable economy. One of the few economic laws that is easily understood is ‘comparative advantage’, and the net gain from specialisation (see Box 5.1). Japan 73

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Box 5.1: Comparative advantage The principle of comparative advantage was articulated by David Ricardo in 1817. It refers to the ability a party (whether that being an individual, a firm or a country) has in producing a particular good or service at a lower opportunity cost and marginal cost than another party. The principle implies that if countries specialise in producing goods with lower opportunity costs and engage in trade, an increase in economic welfare will result. Trade is driven by the relative cost difference within each country, whereby countries will export goods when their cost is relatively low in terms of other goods. Ricardo states, ‘it is best for each country to export those goods for which it has the greatest relative cost advantage and to import goods which are relatively more costly’ (quoted in Norton et al. 2010, p. 329). Trade benefits both parties, despite the fact that one may produce all goods and with fewer resources than the other. The graphs below illustrate the principle. Consider two countries (A and B). The production possibilities frontier (PPF) for each country is shown by the slopes of the PPF line, indicating the maximum (or total) amount of clothing and food that each country can produce given its resources and technology. To simplify the model, both PPFs are shown as straight lines.

Both countries A and B can have the potential to gain from trade by exporting what each can produce at a lower relative cost than the other country. How to understand this? For country A, each food unit costs 1.5 units of clothing to produce; that is, if all the country’s resources were devoted to production, 10 units of food would be bought into being but no clothing would be made. This is why we can state that one unit of food ‘costs’ 1.5 units of clothing. Whereas for country B, the same unit of food would cost 2 units of clothing. A trader could buy a unit of food in country A for just over 1.5 units of clothing, and sell it to someone in country B for just under 2 units of clothing, producing a profit from trade of almost 0.5 units of clothing per unit of food that is exported from country A to B (based on Norton et al. 2010, p. 330).

can afford to import fantastic quantities of food because it sells equally fantastic quantities of motor vehicles and manufactured goods throughout the world. On economic grounds David Suzuki’s case does not stand up. Food self-sufficiency only makes sense in specific circumstances, such as if your country is cut off from the rest of the world by your enemy’s army or navy. In earlier times it would have been your castle under siege. On the other hand, food security, being able to feed your people on a good diet, is necessary and is

5 – Trade, foreign investment and comparative advantage

aimed for by even the poorest countries. Food security and food self-sufficiency are not the same thing. It is no surprise that the UK is a significant food deficit country. Britain traditionally buys raw materials from overseas, converts them into consumer products, and exports the finished goods. This is considered smart economic behaviour. Of course, if a country can be efficient in both growing food and processing for export, it gains the benefits of value-adding. What is interesting to note is that Russia is high up in the list of food importers. As argued elsewhere in this book, there is a real prospect that derelict Russian farmland will in due course again be put to productive use. There are no agri-ecological reasons why the Russians cannot feed themselves and their country become a major exporter. The problems are to do with the nature of the Russian economic system. That could change, given the high level of education and literacy in the country. Sooner or later the institutions needed for the machinery of a modern economy will be put in place. There is also the possibility that later this century Russia will be one of the few countries to benefit from increased agricultural production due to global warming. Simply put, what are now extremely cold regions with ever-so-brief summers will become warmer and will stay warmer for longer. Climate change negotiators recognise the ambivalence of some of their Russian colleagues and understand it in these terms.

Australia’s export focus The nations that in the future will interest Australian farmers most include China (plus Hong Kong), the Republic of Korea, India and Indonesia. Long-standing trading partners such as Japan and the United States and the European Union will not disappear. Trade to these countries can only expand. China stands out. A particular product sought by the Chinese is top quality milk (fresh, milk-powder or otherwise safe milk). Contaminated locally produced milk led to the death of small babies in China a few years ago. Since then consumers seek imported milk products. Australian newspapers regularly run stories of Chinese interests purchasing Australian dairy farms. As we will see later, other products are likely to be more important than milk. Both India and Korea will need to be watched; India because its development is very uneven yet it has the potential to increase its middle class substantially; Korea because new demands will result if reunification occurs. Indonesia could become a relatively important nearby market, due to its large population and economic growth prospects. China and India featured in forecasts made by economists in ABARES when they looked forward to 2050 from a base year of 2007 (see Fig. 5.1). We recognise this exercise by ABARES’ economists as a courageous, challenging piece of work. The results are not unexpected if we keep in mind the increases are based on small starting positions; for example, red meat consumption has been low in China until recently. The same is true for dairy products. The dramatic increases that are predicted all play to Australia’s strengths. Beef, wheat, sheep meat and dairy are products Australia does very well. They are foods that emerging middle-class people seek out.

The competition Australian farmers are presently leading the world with yields per hectare, but it must be expected that our competitors will have an easier task in catching up by learning from Australian farmers than the Australian farmers have of finding new ways to maintain the yield

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(a) Beef

(b) Wheat

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4

Fig. 5.1.  World food demand, from 2007 to 2050. Source: Linehan et al. (2012).

gap. There is the case of countries learning from Australia by importing Australian agricultural products and aiming to become self-sufficient when they have mastered the tricks of the trade. At that stage they will cease buying from Australia. This is, potentially, the situation with Indonesia’s explicit policy of self-sufficiency in beef. Our live cattle exports not only feed Indonesian consumers; Indonesian beef producers learn about our breeds. Notwithstanding competition, China is expected to generate huge increases in demand for Australian beef, wheat, sheep meat, sugar and dairy products. Australia is closer than

5 – Trade, foreign investment and comparative advantage

its competitors in the Americas and its agricultural products have a clean and green image, and for those desiring even darker ‘greenness’ and purity its organic branding of the vast beef and sheep land is a plus. India is forecast to seek an enormous increase in dairy products and nearly equal China in demand for wheat. In India, the dominant Hindu religion puts a major brake on beef imports. If we can increase production to go some way to meet this increase in demand, we will have found a partial answer to the expected decline in the foreign earnings from our underground resources (ores and coal). Even if we can’t increase production but global demand outstrips global supply, we should be major beneficiaries. Australians need to keep reminding themselves that mining is about using up resources whereas farming is about the ongoing replacement of that which is consumed. In other words, it is sustainable – if done properly.

A caveat A note of caution is warranted at this stage. While there is significant evidence to support the forecasts, based on basic economic relationships between population and income levels in relation to expenditure on food and on food tastes, unexpected events and the possibility of long-lasting changes must enter into our thinking. Given that to be a prosperous farmer you are sustaining the ecological vitality of your land, your next objective is to work to sustain your farm income by reacting to changing circumstances. This is what economic sustainability means. That the market for your product is in the hands of many over whom you have no influence is a fact of life. Your sustainability strategy is to avoid irreversible decisions as far as possible, and that means among other things being able to switch crops, and switch between grazing animals and crops, as market prices change. Avoid irreversible changes to your land. When it comes to our potential export competitors, the ‘usual suspects’ are easy to identify because they are in the global market as we write. Yet there are, or could be, others waiting in the wings, and we don’t notice them. What country, or region, could develop its farming capacity rapidly and compete in world markets with Australia? What country or countries might be successful in developing its or their own agricultural capacity to the extent that Australia imports are no longer wanted? A possibility in this regard, and one we have been alerted to, is the wish of the Indonesian Government to achieve self-sufficiency in beef (and other foods) by 2020. In the run-up to the Indonesian presidential elections in 2014, both candidates promised that their country would become less reliant on Australian cattle imports. The winner of that election, Joko Widodo, suggested imports would be phased out by 2020. In the Jakarta Post of 31 January 2015, he spoke of self-sufficiency coming about in three years. According to the Indonesian Food Law No.18/2012, food security is defined as 90% selfsufficiency. Indonesia will remain difficult to judge. Notwithstanding the material benefits from trade, political matters both within Australia and Indonesia and between the two countries have the potential to hinder trade relationships. One recent event was the execution by Indonesia of the convicted Australian drug smugglers Andrew Chan and Murujan Sukumaran on 29 April 2015. The public record shows that the majority of Australians felt deeply hurt, disgusted, disturbed and betrayed by this. Whether or not Australia’s extensive financial and on-the-ground assistance to Indonesia after the near-complete destruction of the city of Banda Aceh by the 2004 tsunami should have been a factor in granting clemency, many Australians believe it should have been. They put it simply: friends

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reciprocate. It would not surprise if a generation or more will need to pass before the thought of the executions fade sufficiently to no longer influence Australian attitudes. For those who are interested in a detailed discussion of the impact of this matter and others (banning export of live cattle, support for Timor Leste, turning back refugee boats) should consult Ken Ward’s 2015 book Condemned to Crisis? In terms of Indonesia achieving self-sufficiency, maybe the goals (or wishes) of the Indonesian Government do not matter. As Warr (2011, p. 5) reports: ‘Indonesia is a net importer of all its major staple food commodities, including rice, maize, cassava, soybeans and sugar’. Regardless of this, we must think hard about the exports of beef. The Indonesian middle class, estimated at ~30 million, prefers freshly cut meat to frozen. This in part explains the high demand for Australian live cattle. How soon before the Indonesian farmers can meet this demand? This would be the end of Australia’s live cattle trade, which at present supplies 40% of the Indonesian requirement. If Indonesia became self-sufficient in beef, wheat and sugar, this would put a serious dent in Australia’s foreign exchange earnings. Imagine China becoming self-sufficient in food. Its present leadership wants that outcome, notwithstanding the fact that in 2011 it became the world’s largest importer of agricultural products. Vast subsidies, according to the Economist, 16–22 May 2015, more than given out by any other country, bolster its farmers, yet imports are required to feed its people. China is viewed as the most important growth market for key Australian agricultural products, and so it will be unless the unexpected occurs, as on occasion it does. We should have learned from history that it is wise to expect the unexpected. If you are a farmer reading this, your world will certainly be defined by the vagaries of nature and short-term market conditions, and that is understood. What we need to pay attention to is the unexpected, the unpredictable and the unknowable: we can’t divorce world food trade from the wider political–economic situation. Four unexpected political–economic events defined the 20th century. There were two world wars. There were two revolutions in Russia, first the coming into being of the Soviet Union in 1917, and second the collapse of the Soviet Union in 1991. No one to-date has put together a comprehensive analysis of just how significant in political and economic terms these events were. All we know is they changed the world, and twice in the same century, and they took us by surprise. These were not the only surprises. China went ‘Red’ in 1949. In 1979 it became capitalist, and as a consequence of its transformation on the road to becoming an economic superpower we give over much space to it in this book. The resurgence of fundamentalist Muslim politics has been yet another unexpected occurrence. The very recent lifting of sanctions against Iran is yet another unexpected political and economic event. Long-range weather forecasting can be easier for farmers than the daunting task of predicting where and when markets will open up or be closed. Prudence and the empirical evidence points to where agricultural exporters should focus over the next decade or so. The number of consumers and their disposable income are the drivers we keep on mentioning. Hence, it will pay economic and political analysts to think about what could happen to both China and India in the years to come. As we go to press the Chinese stock market has the wobbles due to a fear that there is a real estate bubble about to burst. There is relatively scant sound data on which to make a judgment, but we should not discount the existence of such a bubble. The Chinese are noted gamblers (as are Australians if the conventional wisdom still holds), and an emerging middle class, with no experience of the stock market, could become enamoured with the prospect of immediate wealth (see Figure 5.2). Even Chinese farmers can be seduced by the stock

5 – Trade, foreign investment and comparative advantage

Fig. 5.2.  The lure of the stock market. Source: Courier-Mail, 29 August 2015.

market. A Chinese farmer is quoted as stating publicly: ‘it’s a lot easier making money from stocks than farm work’ (Courier-Mail, 29 August 2015). How successful a so-called ‘communist’ government is in macro-economic management will be closely watched. Any serious downturns in the Chinese economy will flow on to its major trading partners. India will pay watching, but for different reasons. By 2020, India will have the largest population in the world. And its population will continue to grow while the Chinese population shrinks. The number of potential Indian consumers is one thing. The number with sufficient purchasing power to be targeting Australia’s top quality farm produce is another. A very large proportion of the Indian population is illiterate. Eminent French economist Thomas Piketty (2015, p. 80) believes it is 50%, and he argues that without dramatic investment in education ‘India (will) very likely remain mired in misery for a long time to come’. And not to neglect the Middle East, Africa and Latin America. Maybe, just maybe, the tribal and religious conflicts in the Middle East and Africa will be resolved and peace will reign. Such possibilities should not be ruled out. It is not only the various possibilities of dramatic changes in political and economic ideologies and what that might mean for global trading patterns that should command our attention. Technological breakthroughs in agronomy, genetics, chemistry and engineering are often one laboratory experiment away. Did anyone foresee Norman Borlaug’s Green Revolution? Significant breakthroughs, if they provide a competitive advantage to a first mover, shift trade patterns and determine new trade relationships. For example, it is not much more than a century ago that sea transport ceased to rely on wind and refrigerated holds were incorporated into ships. This had an enormous influence on what agricultural products could be sent overseas, and to where. Not much more than a

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half century ago Australian seafood exporters became able to transport live lobsters to Japan and Hong Kong by aircraft. The animals were loaded on a plane in Perth, had an imposed ‘sleep’ on the flight, and were awoken on arrival and put in a restaurant live-display fish tank. Of course, it is not just farming, fishing and food that should have us pondering our limited ability to forecast the future. Did we see the internet coming? Here is another example of being caught unawares. A resource-recovery revolution is having a significant economic impact in the early decades of the 21st century. It is the exploitation of what Australians call ‘coal seam gas’. In the United States this occurs by the process ‘fracking’. Just when ‘peak oil’ was deemed the major threat to the future of the fossil fueldriven economy, new technologies are allowing the extraction of natural gas and unconventional oil in quantities not envisaged by the most optimistic fossil fuel advocate. One must pay respect here to those economists who resisted the argument for ‘peak’ fossil fuel, although peaks are inevitable in the long term. In the short term, the technological optimists proved right. The above is a shortlist of, albeit major, unexpected events that have had, and are having, very important consequences across the globe. We point to them for the purpose of instilling a degree of caution when developing forecasts for the export of food.

China in particular With regard to China we need to be mindful that its rapid economic development has been possible due to a strong government with a seemingly endless supply of cheap labour. This is what development economists refer to as ‘the Lewis phase’ of economic development after the famous Saint Lucian pioneer of this field of economics, Sir William Arthur Lewis. While there are still hundreds of millions of extremely poor Chinese, possibly one half a billion still living on less than US$2 per day (World Bank 2010), substantial wage increases will come to be paid to those who work and live in the Chinese cities. This will allow these people to purchase more from overseas. However, this will slow down the rate of growth in aggregate of the Chinese economy as low-paying jobs will be sourced in other, less advanced Asian countries. Whether it is labour, land or raw materials, demand and supply must come to play their role as the Chinese economy grows. Demand will come up against resource constraints, including labour, and prices will rise. Chinese firms will come to substitute capital (machinery) for labour as wages increase. This will be the case if the elasticity of substitution is favourable. However, state-of-the-art machinery commands world prices, whereas pay rates for Chinese workers, even as their wages increase, won’t be comparable to those of a fully industrialised country for some decades. This should dampen the rate and extent of substitution, but not prohibit it. Ultimately, lower wage and resourcerich countries will out-compete China. Its manufacturing sector will shift to more elaborate, complex goods. The per capita income of Chinese consumers will increase but at a decreasing rate, and so demand for imported foods will change. Engel’s law will set in. The increasing inequality in China is another thing to be aware of, and a factor to consider in long-term forecasts. The Chinese Gini coefficient, a measure of inequality, was 0.28 at the start of the country’s take-off in the early 1980s and by 2008 had reached 0.48 (Nolan 2012, p. 69). Several analysts have suggested that the Chinese Gini coefficient, and hence inequality, is much higher than 0.48. The lower the coefficient the more equal the distribution of income and wealth. The irony of a so-called ‘communist’ nation becoming less and less unequal in income distribution is not lost on economists and political scientists. However, they have no idea how this is likely to play out. Will China eventually become an egalitarian Asian ‘Nordic’ nation, or another ‘seven dollar’ minimum wage United States? The route that China takes will have a significant impact on the distribution

5 – Trade, foreign investment and comparative advantage

of income in the country and that will have a direct impact on what goods and services are consumed, including what ones are imported. Finally, there is the ageing of the Chinese population. Nolan (2012, p. 68) suggests, it will be ‘grey’ before it has become rich. As shown above, there are brave economists who have predicted growth in demand by Chinese for food, looking as far ahead as 2050. However, a different set of consumption patterns from the ones they have predicted could be the result.

Australia and trade The process of exporting and importing goods generates employment for Australians, with one in five jobs linked to international trade. It is important to recognise that Australian agricultural exports provide millions of people with access to high quality, nutritional food. At the time of writing, two-thirds of Australia’s agricultural produce is exported. Wheat and beef are the main items. Both the export and import markets are set to grow in coming decades, with an increase in agricultural production a desired outcome, facilitated by more relaxed trade agreements with our Asian neighbours.

Foreign investment in Australian agriculture As we write, there is increased interest by foreigners in investing in Australian agricultural enterprises. Of course, if investment is to lead to increased agricultural output, what is required is not simply a change in ownership of farms and food processing plants, but extra money to be put to productivity enhancement. Foreign ownership of agricultural land can be an emotionally charged political issue for Australians, as it is for most countries. It is not only Australians who concern themselves with who owns what, as numerous other countries are much stricter on this issue, some not allowing foreign ownership at all. When Australia was a British colony, Australian agriculture was heavily dependent on British investment. Much had to be done which could not be funded by the earnings and savings of colonists. For example, the vast sheep stations that came into being had to be fenced, shearing sheds, shearing quarters and homesteads built. Bores had to be sunk in search of that much prized artesian water. Paddle steamers to drag the wool-laden barges down rivers such as the Darling and Murray had to be financed. Before these investments were made, unfenced paddocks of enormous size saw sheep roam with only shepherds to control them. This would have made sense in the Scottish Highlands or the Wessex of Thomas Hardy’s farmers, but not on the vast plains west of the Great Divide. British investment made the necessary farm improvements possible. The major wool-broking-cum-stock agents-cum-sheep station owners were British. There was Dalgety’s and there was the cutely named Australian Estates among them. The latter owned the largest sheep station in the world in the 1950s, Thylungra, west of Charleville. This property has been broken up into smaller parcels in recent years. In 1911, over 100 000 sheep were shorn on Thylungra. This property was established by the pioneering cattle grazier Patrick Durack in 1868. Its name is taken from the local Aboriginal word for ‘permanent water-hole’. In otherwise near-desert country this water-hole permitted the grazing of an enormous flock of sheep. They had to be hardy and therefore were coarsewool merinos. Shorn fleeces carried the reddish dust well down the length of their staples. When washed, or scoured, the fleeces weighed much less than when shorn. Australian Estates owned numerous other large sheep properties in its period as a prime player in the wool industry, including the famous Mount Morris on the Langlo

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River near Adavale, Queensland. A degree of vertical integration existed: woolgrower, wool broker and wool handler. Australian Estates no longer exists, but its role in developing the nation’s wool industry is of historical importance. The classical example of foreign investment in Australian agriculture is that by the Australian Agricultural Company (AACo). This was established in 1824 by, as described by Evan McHugh (2012, p. 65), ‘the cream of British politicians and financiers’. It was off to a great start with a million acre (400 000 ha) grant of land. Other grants followed. Today AACo is Australia’s number one beef producer. It runs nearly half a million head on 24 stations that encompass 7.2 million ha. Be mindful of this when the Texans with big hats tell their tall tales. King Ranch in Texas is deemed to be the largest beef property in any other country than Australia. It is a mere 334 000 ha. In much more recent times, the benefits of foreign investment in Australian agriculture are illustrated by the Japanese and US investment in the beef industry. Consumers in these countries seek certain styles of beef, and ownership of beef properties by companies from these countries led to innovations to meet the respective markets. Improved cattle-raising practices, selective breeding and the expansion of feedlots led to the style of beef wanted in the countries making the investments. There are various reasons why Australia is viewed as a good investment option. It has a stable political environment, a highly skilled workforce, a culture of industrial and agricultural research and innovation, and abundant natural resources in relation to its population. Low sovereign risk is also highly valued. Australian government changes political hands but, viewed from outside and objectively, much remains the same. This favours Australia in comparison to many Latin American and Sub-Saharan African countries that otherwise would be strong competitors for foreign funds seeking agricultural land. It is not unexpected that segments of Australian society do not look upon foreign investment favourably. There usually is a catalyst for an outbreak of concern; as examples, when in the 1980s Japanese investors were obvious (mainly in tourism) and more recently Chinese investors. In the case of the Chinese a negative factor (in the minds of some) is the fact that the money coming into Australia is what economists call ‘sovereign wealth funds’, meaning that it is Chinese government money being invested. The logical conclusion for those who worry about this is the influence the Chinese Government could bring to bear on its companies in Australia. It is in the order of half a century since China was commonly called ‘Red China’ by Australian politicians, and trading with China was considered unpatriotic. Some lingering suspicion of Chinese intentions is evident in certain quarters.

The World Trade Organization, free trade and bilateral freetrade agreements In a so-called globalised world where financial capital and speculative funds slush around the planet with the press of a computer key, the efforts to expand genuine free trade are pitifully slow. Powerful nations in which farmers have considerable political power tend to act in the interests of their farmers, not their consumers, and certainly not in the interests of the poor farmers in developing countries who have much to gain from open markets. The World Trade Organization (WTO) evolved out of the General Agreement on Tariffs and Trade (GATT). The latter body was established in 1948. The concept behind it was sound, for good reason. Those who had experienced the massive loss of life (20 million in the Soviet Union alone) and the devastation of the Second World War (not to forget the First World War) aimed to make certain that international trade disputes did not lead to yet another war.

5 – Trade, foreign investment and comparative advantage

The GATT focused on reducing tariffs, which were the preferred means of protecting local industries while generating income for the governments that collected the tariffs. What economists call ‘infant industries’ (usually in the manufacturing sector) and agriculture were the prime focus of tariff protection. There are arguments to justify protection of both. There are infant industries, just like infant humans, needing help until they can stand on their own feet. In the agricultural sector, the issue is different. It often, not always, boils down to preserving small farms and small rural villages. Such cannot, as a general rule, compete on costs with vast agricultural enterprises and their economies of scale. This is a fascinating debate and not resolved except in the minds of the dyed-in-the-wool free traders. Developing countries (tending to be referred to as ‘the South’), with right on their side, assert that trade should be fair. The Fair Trade movement has had some success but faces extremely powerful opponents. The sustainable development agenda is that one should not separate trade from environmental protection and workers’ rights. It is, therefore, more in line with fair trade than conventional free trade. As final point on a huge topic, we should note that free-trade advocates are not enamoured with its outcomes if a competing nation is ‘dumping’ goods into its market; that is, selling them below cost with the aim of gaining market share. Complaints will be laid. The GATT procedure is to hold discussion ‘rounds’, named after the city where the globes’ agricultural bureaucrats gather for the purpose of making progress, not frequently enough to speed up progress. The Uruguay Round decided to turn the GATT into the WTO and focus on agriculture, the enduring sticking point in the opening up of genuine free trade. On 1 January 1995, the WTO came into existence and so did the Agreement on Agriculture. Its goal is to establish a fair, market-based, global agricultural economy. The current round, called the Doha Road, commenced in 2001. It is far from conclusion. As a poor substitute for fair (free) trade, countries enter into bilateral and regional agreements. As we write attempts are being made to establish what is called the Trans-Pacific Partnership. A total of 12 nations including Australia are to be members. Neither China nor India is included. Bilateral trade agreements are popular. Purists object to them being called ‘free-trade’ agreements. Again as we write, Australia and China are in the process of negotiating such an agreement. This agreement, combined with similar ones with Japan and Korea, can be a welcome outcome for Australian farmers. The Australian media make much of the benefits: ‘dramatic tariff reductions across agricultural exports’ (The Australian, 17 June 2015). Yet, as always, the devil is in the detail and can mean that not all agricultural producers are winners. Whether or not these, and any other not-yet-formulated, trade deals come about will have much to do with the political lobbying power of farmers in the respective countries. By the way, it should not go unnoticed that the Australia– China agreement took only 10 years of negotiation, and as we write there is no certainty that it will come into being.

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6

Climate, rainfall, dams, bores and irrigation C. Attard

Introduction For the majority of us living in an urban setting along Australia’s coastline, water is viewed as an abundant resource that comes from the tap, something to swim or surf in, or simply providing a beautiful view over an ocean, lake or a river. Water is typically a source of a conversation that frequently commences with ‘I hope it doesn’t rain today …’ This is most likely from a city dweller not wanting the hazards of driving in wet conditions. For those who live ‘in the country’, on farms or rural inland towns, the scarcity of this natural resource makes it more precious than a view or recreational amenity. All too frequently conversation among inland residents might go like this: ‘Did you hear that Narrabri got 15  mm last night?’ Envy could be evident. The reality (not necessarily evident to citydwellers) is that your dependence on water for survival is just as high as that of the next person, regardless of where you live. Saltbush Bill, JP, one of A. B (Banjo) Paterson’s characters, captures the essence with: ‘I’d like to see green grass again; And watch clear waters run, Away from this unholy plain, And flies, and dust, and sun.’ The true value of water, along with our dependence on water, is all too often overlooked in modern society. Food, as an example, is typically purchased from a store (most likely from one of the ‘big two’ supermarkets) without much regard to the types and quantity of inputs required, namely the natural resources consumed such as water, soil nutrients and fossil fuels (fertilisers) in the production of the item on the shelf. Consider that for a single kilogram of beef to be produced around 15 000 L of water can be required, and around 50 glasses of water can be required to produce just one single glass of orange juice! (Hundloe 2009). Compare that to the amount of water we drink as water, and it quickly becomes apparent that we inadvertently not only consume, but also require, much more water than we realise.10 In a developed nation like Australia it is easy to forget, and sometimes unthought of to question, where water comes from. Small children will understand that it ‘comes from’ a 87

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tap or a bottle. At what age will they comprehend that the rain that they can feel on their bodies is the same stuff that comes from a tap? How much water is there? And how much water is ‘used’? What does ‘using’ water mean? These fundamental questions will be explored and answered throughout this chapter. The aim is to give the reader an understanding of this renewable but limited natural resource and its relationship to farming in a country that holds the world’s title for ‘driest inhabited continent’, and in an ironic twist produces some of the finest agricultural produce in the world.

Farming and water Agricultural activity in Australia is diverse and comprises horticulture, broad-acre crop cultivation, extensive pastoral grazing, intensive livestock fattening, egg production and fish-farming. We have missed a few minor ones. Farm production utilises a significant proportion of the nation’s natural resources; in recent years farming in all its forms accounted for nearly 60% of the Australian continent (in the order of 460 million ha). There has been a slight decrease over the past 20 years, resulting from converting some grazing land to nature conservation. Agricultural water consumption accounted for twothirds of water-use in Australia in 2012–13; this is the peak since the commencement of reporting water use in 2008. There have been significant variations in agricultural water use over these few years, with more used in periods when the dams are filled (ABS 2014b). The total land area in Australia that is currently irrigated is over 2.1 million ha but represents a mere 0.5% of all agricultural land. From these figures we can appreciate that only a tiny proportion of land that is used for agriculture is irrigated; however irrigation is responsible for well over half of the entire national water consumption. Just over one-third of farmers irrigate. In their history of Australia, Australia: Colony to Nation, Dunlop and Pike (1963, p. 195) write: ‘Nothing has changed the pattern of Australian agriculture like major irrigation’. The first major irrigation works were constructed in the Goulburn Valley and the Wimmera, Victoria. The Murray River offered the greatest potential, and a scheme was established for Mildura. It was to put water from the river into channels that would feed the farms that were to be established. A similar project was put in place in Renmark, South Australia, and yet another at Curlwaa, New South Wales. These schemes were operating by the 1880s. Australia’s dried fruits industry had its genesis with these irrigation schemes.

How much water is there? To understand the role of water and answer the question of how much is there of it, we must first understand that there is no less or more water than there was 100 years ago, 10 000 years ago or millions of years ago. Similarly, there is not going to be any more water in 100 years, 10 000 years or in millions of years into the future. If there has always been the same amount of water on Earth, then where is it? The term ‘hydrosphere’ describes the total mass of water on, in and above the surface of the Earth. Water covers ~71% of the surface, and 97% of all water is contained within oceans. The total of all water within the hydrosphere is close to 1.4 billion km3. However, only 3% of total water on Earth is fresh water (non-saline), and of that small percentage the greater part (69%) is in ice-caps and glaciers. Fresh groundwater equates to 30% of the total fresh water, and rivers contribute only a mere fraction of total fresh water available for consumption.

6 – Climate, rainfall, dams, bores and irrigation

A variety of factors are involved in measuring the volume of water Australia receives and, ultimately, how much is available for use. The first thing to note is that it is not correct to assume that the same amount of water is consistently present or is made available to Australia all the time. The amount is highly variable, and the sum of Australia’s water ‘assets’ (the term ‘assets’ has come to mean the volume of surface and groundwater that by law we are able and allowed to capture, extract and use) is determined by climate as well as by properties of the natural landscape. Since the advent of large-scale water impoundments and irrigation schemes as well as the sinking of groundwater bores, humans have come to have a significant influence on the water available at any point in time.

Australia’s climate Climate is more than just what the weather is usually like. It pertains to the natural variability of the Earth–atmosphere system. The study of climate (climatology) provides information on the likelihood of particular short-term events, what we term the ‘weather’. Climate and weather are two features of the broad science of meteorology. If we describe conditions over short periods of time (days), we refer to ‘weather’. The more slowly varying characteristics of the atmosphere are defined as ‘climate’. To be concise, climate is the sum of all the weather events (such as minimum and maximum daily temperature) recorded over a long period of time. Very useful data are provided by the analysis of climate, such as the average temperature (most common conditions), the highest rainfall (an extreme), the number of rainy days (counts of events), along with the likelihood of events (probability). This information is extremely valuable to farmers in making day-to-day, season-to-season and longer-term decisions; for example, when to plant crops or move cattle; or planning for extreme weather events such as floods or cyclones and, in the even longer term, climate change. Climate determines where and when particular crops are best grown, where particular breeds of cattle are suited, when to fertilise, and when to harvest. With these introductory remarks, let us focus on climate influences and climate elements. Both are important in terms of an overall effect on agriculture; climate elements such as rainfall, temperature, wind and humidity are a result of the weather patterns influencing long-term variability of Australian climate (climate influences).

Weather patterns Australia claims the geographical attribute of being the flattest and lowest continent in the world (it has been ‘worn down’ by age). There are other equally important characteristics of the country. Its land mass stretches from the tropics to the temperate zone (add the Antarctic zone to include the southernmost islands). This means there isn’t one ­singular seasonal calendar; rather, the country displays a wide range of climates. There are six climatic zones based on average temperature and rainfall. Some are named in regard to geography (for example, tropical), and some according to their land cover (for example, grassland). During winter, high-pressure systems are inclined to be situated over the Australian continent. Along the east coast, light easterly winds cross the north of the continent. This inland moving air, after losing its moisture, provides little winter rain to both the tropics and inland regions. On the other hand, the southern temperate regions receive rain (and snow in parts the south-eastern highlands) from westerly winds, after they have picked up moisture from the ocean. Much of the country’s intensive agricultural activity (both

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cultivation and grazing) occurs in the temperate regions of the south and east, where production relies on this winter rainfall. In the summer months high pressure systems move to the southern fringe of the continent, creating typically dry conditions for the southern third of Australia, with only minimal rain experienced in the south-east. The summer sun heats the land in northern inland Australia. The cool sea breezes are unable to reach the inland area, resulting in hot air rising and being replaced by warm humid air flowing in from the surrounding tropical oceans. Differential heating of the land and sea drives this seasonal wind change (monsoon circulation) and triggers the northern Australian wet season. The very high rainfall areas, particularly on the east coast, are perfect for sugar-cane, bananas and other tropical fruits.

Inter-annual variability The weather in Australia is constantly changing, and the climate varies over time – year to year, decade to decade, and over longer time scales. Here we are not factoring in climate change driven by the build-up of greenhouse gases. That is another, albeit, extremely important, issue. The change and variation of rainfall and temperature can be attributed, in part at least, to the effects of La Niña and El Niño Southern Oscillation phenomena. The El Niño Southern Oscillation is the warming of a large portion of the central and eastern tropical Pacific Ocean, leading to a significant shift in atmospheric circulation. This affects weather across most of the Pacific Basin, increasing the likelihood of drought in eastern Australia. La Niña has the opposite impact on Australia. In this case there is a period of abnormally low sea temperatures over the same ocean region. This increases the likelihood of above average rainfall occurring in Australia, with an increased chance of flooding. Another impact that El Niño has on Australian agriculture, besides drought, is the increased frequency of late-season frosts over inland areas. During La Niña summers, the impact of cyclones is more prevalent in the northern tropical regions. Cyclones destroy banana crops, have adverse impacts on sugar-cane crops, strip fruit from lychees and mango orchards, and generally play havoc with coastal farming and tourism and destroy or damage the houses of both city and rural dwellers. On crossing the coast and losing their intensity, cyclones tend to bring abundant rainfall, often to those generally dry savannahs and semi-arid parts of inland Australia. Many an economist has had difficulty in determining the aggregate impact of a cyclone given it does damage but produces benefits, although to different farming communities and over varying time spans. Victorians worry about El Niño and the increased probabilities of droughts and bushfires. Fluctuations between the sea surface temperatures of the western and eastern regions of the Indian Ocean, known as the Indian Ocean Dipole, can significantly affect the rainfall patterns in central and south-eastern Australia and the state of Western Australia. Higher than average temperatures in the Timor Sea, combined with lower than average temperatures in the Central Indian Ocean, are associated with above-average rainfall in these Australian regions. Conversely, drier conditions are related to the reversed ocean temperatures. In either case farmers are at the mercy of nature. Rainfall Since the ocean is a source of moisture for the atmosphere, a major element influencing rainfall is proximity to the coast. Coastal areas typically receive higher quantities and frequency of rainfall. The height of the land influences rainfall.

6 – Climate, rainfall, dams, bores and irrigation

Where the high mountains are near the coast, such as in the Wet Tropics World Heritage Area (from Cooktown to Ingham) and in the Gondwana World Heritage Area (from the Springbrook Mountains on the Gold Coast into northern New South Wales), we find two of the wettest places in Australia. The Tully–Babinda area experiences the highest average annual rainfall in the country. Springbrook receives about half the rainfall of its northern counterpart, but can still lay claim to being the second wettest place in Queensland. Tully is where most of the nation’s bananas are grown. When records were kept of the size of banana hands, a farmer (Wally Rose) from the Springbrook locality of Numinbah Valley took out the national prize. On the other hand, where the Great Dividing Range is considerably west of the coast (around Townsville and Rockhampton), the coastal areas are relatively dry and farming centres on cattle grazing. It is worth reiterating that the variability of rainfall in Australia is very high. The average long-term annual rainfall across the country varies from less than 300 mm per year in central Australia to in excess of 4000 mm per year in small parts of northern Queensland, the Tully and Babinda region. Approximately 85–95% of rainfall evaporates from the upper layer of the soil on which it falls, or is transpired by plants into the atmosphere. The combination of these two processes is known as evapotranspiration. The remaining 5–15% of water runs as surface water into streams and wetlands, or drains into groundwater aquifers. The quantity of rainfall that is utilised by vegetation depends on several elements: soil type and depth, vegetation cover and type, the condition of the vegetation, and its stage of development. Different plants require different quantities of water. The physical attributes of annual crops and pastures, such as having shallow root systems and the absence of sizeable leaves and branches that reduce water interception, mean that they use less water than perennial vegetation such as trees. It is no accident that very large trees grow in rainforests. The emphasis is on ‘rain’. Otherwise large trees are found along riverbanks, a prime example being the river red gum. The vast semi-arid and arid lands of Australia produce grasses and the stunted mallee and gidgee trees. One can estimate the amount of rain a particular location gets by the extent and type of vegetative cover.

Drainage divisions Given the small quantity of fresh water available, where and how does Australia, as an island continent with no ‘foreign’ water to draw on, source its water for agricultural production? We can commence with rainfall. The run-off from the rainfall Australia receives makes its way into both surface and ground water features. These features have been divided into 12 sections known as drainage divisions. They encompass water assets that are based around natural topographic characteristics or catchments. The largest drainage division is the Murray–Darling Basin. When the Hume Dam on the Murray was completed in 1936 it was the largest in the southern hemisphere. Producing one-third of domestic food supply and containing 40% of Australia’s farms, the Murray–Darling Basin is Australia’s most productive food and fibre region. This high level of production is achieved through irrigation. This region accounts for 65% of irrigated land in Australia and utilises over half of the nation’s water. The volume of water used and the attempt to meet conflicting economic, social and environmental demands give the Murray–Darling Basin national significance. The fact that four of the six Australian states have an interest in the basin’s water has resulted in political problems from the early days

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of federation. As we write there is no ideal practical solution to the allocation of Murray– Darling water. In 1949, work commenced on the Snowy Mountains Scheme. The availability of fresh water run-off in this particular catchment area is a result of the high terrain of the Great Dividing Range in the south-east of the basin (with Australia’s highest mountain, Mt Kosciuszko) and a climate that produces high rainfall and snow. Snowmelt feeds the alpine streams 365 days of the year. A drainage division that is attracting a deal of both political and scientific attention in the early part of the 21st century is the Gulf of Carpentaria. A major dam is proposed for the Gilbert River. If developed it could make dramatic changes to the savannah country that is presently used for extensive cattle grazing. A thorough cost–benefit analysis is needed before any decision is made, and even the best possible economic analysis might fall short as certain attributes of the landscape will prove very difficult to measure in monetary terms. Furthermore, the temporal flow of farm income, especially if it is slow to flow, will suffer from the economic convention of discounting benefits if they are far into the future.

Agricultural water assets Let us commence discussing agricultural water assets by making an obvious point. When accounting for water we must consider how much water is available relative to its use. Availability in this context relates to the water resource within a specified area (which could be one of the nation’s drainage basins) and can be captured or abstracted for use. The quantity will be determined by the combined volume of water in surface and groundwater stores. In practical terms this has to be in conjunction with ‘rights to take’, described as ‘water assets’ as discussed previously. In other words, if you are prohibited by governments from taking water (say, from a stream) availability is constrained, or water is simply not available. Australian governments have come to play a far more significant role in water allocation than in the past in response to increasing urban and industrial demands for water plus the realisation that there had been dramatic ecological impacts caused by the previous laissez-faire approach to water use. Various features of the Australian landscape determine where major agricultural pursuits take place. First, the eastern half of the continent is where most rivers exist. There the river systems, such as the Murray–Darling, are extensive. There are numerous rivers feeding into the Gulf of Carpentaria and also into Lake Eyre. The underground water supply is concentrated in the eastern half of the nation. These geographical features determine that most of Australia’s agriculture that is dependent on irrigation or large amounts of bore water will be in the east. The greater part of the water (~45%) that is sourced from irrigation schemes is delivered to farms by constructed irrigation channels. Approximately 25% comes from on-farm dams and tanks; in the order of 15% from rivers, creeks and lakes; another 15% is from groundwater sources (bores and bore-drains); and only tiny amounts are recycled or reused water from off-farm sources (ABS 2014b). In the inland, semi-arid and arid parts of the nation, artesian (bore) water has made grazing possible. Sheep and cattle drink water ‘from the devil deeper down’, as Banjo Paterson described it in his poem telling the story of the desperate drilling for water in an outback drought.

6 – Climate, rainfall, dams, bores and irrigation

The value of water and irrigation As noted above, the variability of natural rainfall in Australia is very high and parts of the country are frequently subject to extended periods of drought. Years can go by while significant parts of the nation remain drought affected. In much of the nation, variability and seasonality of rainfall combined with high rates of evaporation mean that rainfall alone is not capable of supplying sufficient water for the cultivation of crops or anything but extensive grazing. And the latter has to be in sync with the year-by-year availability of water. A grazier caught overstocking during a prolonged drought faces bankruptcy. Irrigation can turn land that was non-viable for cultivation into something better. Where irrigation is available and the soils are suitable, cultivation is feasible. Extensive grazing land can become intensive grazing land with irrigated, improved pasture. Irrigation is also used to increase crop yields where additional water makes a difference. Irrigation makes maintaining optimum soil moisture levels possible, and hence enables crops to be grown in areas where they would otherwise not be viable. It can also permit year-round production, or at least two crops per year. Based on Victorian Government Department of Environment and Primary Industries (2014), these and ancillary benefits of irrigation are summarised as: • enabling the growing of more pastures and crops • enabling flexibility in operations – able to retain soil moisture and meet market/ seasonal demands • enabling production of higher quality crops and pastures • allowing farmers to manipulate and/or control the growing season • providing insurance against seasonal variability and drought • permitting tighter grazing management (stocking more animals per hectare) through reliable pasture supply • enabling farmers to optimise fertiliser application and efficiency thereby obtaining greater returns on produce • enabling utilisation of land/areas that otherwise be considered less productive or too dry • reducing reliance on supplementary feeding (grain/hay) due to improved pastures • increasing the capital value of the property – irrigated land can support higher production rates, making it more valuable. A simple list of the benefits of irrigation does not show the economic value of irrigated production or, importantly, the economic value of the water being used. Below, the discussion will be on how ‘value’ is used to mean different things. Different definitions of the concept can cause confusion. Interest in estimating the ‘value’ generated by irrigation has resulted in the development of a method known as the gross value of irrigated agricultural production (GVIAP). This is an estimate of the gross value of agricultural commodities that are produced under the assistance of irrigation. It is very important to note that GVIAP does not represent the value that irrigation adds to production, or the net effect that irrigation has on production, that being the difference between a commodity’s value produced under irrigation compared to its value had it been produced without irrigation (rain fed). Let us commence with how irrigation can benefit production as listed above. Irrigation can allow two crops to be grown per season rather than the one if the crop relied solely on seasonal rainfall; as another example, cattle put on more weight in a shorter period if fed

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on irrigated pasture rather than eating native grasses. The economic value of the water provided through irrigation can be measured in these, and numerous other similar cases, by comparing the with-irrigation production to the without-irrigation case. (The ‘with and without’ concept is used extensively in economic analysis, particularly cost–benefit analysis.) The theory is easy to understand but the practice is not so easy to implement as the required data can be elusive. If we were to separate the production added due to different amounts of water applied, all other productive inputs (fertilisers, soil quality, labour and so on held constant), each unit of water could be valued. This is what economists call the ‘production function’ approach, where the aim is to determine the ‘optimal’ use of inputs given their costs per unit and the extent by which they increase output (their ‘marginal product’). Optimal in this sense means that the mix of inputs that results in the least-cost production of a given output. Putting this into practice is a problem due to the great variability in resources used by farmers, differences in farming practices, and the range of farming skills among farmers. One is unlikely to stumble across a model farm or a truly representative farm. Agricultural production functions are easy enough to formulate for model (experimental) farms, but prove elusive in the real world. This is the key reason that it is difficult to transfer experimental research and replicate it on a working farm. These are just too many variables to control. Variations in regional climatic conditions influence the extent of irrigation required. The quantity of irrigation in any specific year will depend on rainfall that year, which could be rainfall in total or rainfall distributed over the growing season. The timing, location and volume of rain will determine the amount of irrigation water required. In the same way soil type and capacity to retain moisture influence irrigation requirements. How the irrigated water is supplied (flood irrigation, sprinklers, drip) and the amount of evaporation will determine the quantity of water applied to the crop. If flood irrigation is used and the result is excess water (over-irrigation), how should we value that excess? It has played no useful role in plant growth and is likely to have caused some downstream environmental and economic costs. It would seem, then, that water in excess of what can be utilised by the crop should have a negative economic value attached to it. This is the case even if the farmer paid good money for this water. Water is not the only input required for agricultural production. Other equally important inputs are fertiliser, land, machinery, and labour. In order to estimate a dollar value of water (or irrigation) these contributing factors to production must be able to be measured and held constant while the quantity of water applied is varied. Very difficult on a real farm; not so difficult in an experimental plot. Obtaining the necessary data to construct a reliable production function would involve collecting, at an individual farm level, accurate information on gross revenue from sales of the commodities grown on irrigated land. The cost of inputs would also be required. This requires farmers to open their financial books and disclose information on costs and earnings. Of course, this information has to be verifiable, comprehensive, and cover many years if it is to account for the variations in climatic conditions as discussed above. To make the data statistically accurate, a large sample of the population of farmers would be required. Clearly, this type of research is costly and this explains why little is done. Data collection is at the discretion of each individual farmer; put simply, farmers are likely to be hesitant to volunteer their valuable time and to give out personal financial details freely. The economic value of irrigation remains vague, and the best we can do is work with approximates or simple models that are prone to inaccuracies.

6 – Climate, rainfall, dams, bores and irrigation

Table 6.1.  Dependence on irrigation Crop

Percentage

Rice

100

Grapes

93

Cotton

92

Fruit

80

Vegetables

79

Dairy

52

Source: ABS (2013).

Land and water usage in different agricultural products Different agricultural products require different quantities of water, and at different times during their growth. Likewise, farm size and location, levels of production, climate and rainfall variability are all contributing factors when it comes to water use per farm. Various factors are at play, including climate conditions, size of cropped area, and the cost of water in comparison to the selling price of the products. Figure 6.1 shows the total land area in Australia under irrigation going back to 1920. Can we realistically extrapolate from this upward sloping curve? One might think not, given the limited opportunities, determined by geography and economics, to build dams and reticulate water over extensive areas. Is it possible that we are at the frontier of our production possibility function? The questions that arise in light of the scarcity and variability of Australia’s water supply are where and how will we be able to source the extra water if we attempt to produce more agricultural products? How sustainable is the production of products such as rice and cotton in light of their demand for irrigated water? Given that water is destined to become more expensive, driven by increased demand and the cost of new infrastructure, irrigated products will need to command a premium in the future. It is important to note that in Australia certain agricultural pursuits are heavily dependent on irrigated water (see Table 6.1).

Land area (x 1000 ha)

3000 2500 2000 1500 1000 500 0

Year Fig. 6.1.  Area of land under irrigation in Australia, from 1920 to 2012. Note: Trend of irrigated land area in Australia through time, showing an increase. Gaps in graph are representative of unavailable data. Source: Based on Bureau of Meteorology (2014).

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Irrigation systems The type of irrigation has a major bearing on the cost of water to the farmer, as well as affecting the environment both on and off the farm. The types of irrigation systems and related technology used for agricultural production are diverse and vary depending on a range of factors. Because geographic locations influence water availability and variations in soil types and topography, a system that works well on a cotton farm located on the Darling Downs (Queensland) may not be suitable, or even available, for a cotton farm in Wee Waa (New South Wales). The type of irrigation system will also be determined by what the farm produces, the level of production (hectares of crops, number of fruit trees, etc.) and the size of the farm. Some farms, particularly if they are producing a number of significantly different products (for example grains, vegetables and horticulture crops) could have a range of irrigation systems. Put simply, there is no one irrigation system that is or must be used for any given crop or pasture, or for a particular farm. The various types of systems available and most frequently operated on Australian farms are described in Table 6.2. Surface and sub-surface drip irrigation with fertilisers delivered in the root-focused drips is the last type of irrigation listed in the table. This process, called ‘fertigation’, is the future for irrigation. It is presently in use over a wide range of farm types and areas around the nation. It is likely to be scaled up in coastal areas adjacent to the Great Barrier Reef with the aim of reducing the discharge of nitrogen and fine sediments to the Reef. Dramatic decreases in run-off of fertilisers are feasible. This is potentially one of those ‘win– win’ ideas that are keenly sought out. Farmers, once they have paid for the irrigation infrastructure, will apply far less water and fertiliser. The cost of converting to fertigation is a farm-to-farm financial proposition. It cannot, yet, be deemed the universal solution. The cost–benefit analyses have to be carried out. Fertigation in the context of agricultural run-off adversely impacting on the Reef is discussed next. Drip irrigation and fertigation A few technical terms are unavoidable in a discussion of drip irrigation and fertigation. First, there is the concept of ‘high distribution uniformity’, sometimes referred to as ‘distribution efficiency’. This means that each plant should get the same amount of water; otherwise yields are likely to vary between plants and those that are starved of water will yield less, a loss of productivity. There are reports of 93% or higher distribution efficiency with sub-surface drip irrigation, compared to 60–80% for sprinklers and 50–60% for surface irrigation. The ability to control the distribution of water means that soil moisture at the root zone of plants can be managed. We might say ‘optimised’, meaning that each plant gets something approaching its requirements, no more, no less. The farmer can allow for variable rainfall, irrigating in relatively small doses when water is needed. Water probes distributed throughout the cultivated paddock provide the data the farmer needs. This fine-tuning of irrigation is a significant saving of water and is an economic benefit to farmers if they are paying for the water they use, as many are in the modern era. There are several other benefits of drip irrigation. For example, once installed, the system requires less labour to manage than other forms of irrigation. To put it simply, it is a matter of turning on and off the tap as one does when having a shower. Paddock size and shape do not matter as there are no economies of scale as there are for some of the alternative forms of irrigation. Less levelling of land is required for sub-surface irrigation than for most other irrigation methods. There is less water lost from soil surface evaporation. Less

A paddock is divided into bays separated by ridges. Water flow is guided down the natural slope of the land by the ridges. The steeper the land the more closely the ridges are spaced. They can be curved to follow the contour of the land.

A method used on flat land with soils that retain water. The ends of the paddock are closed to form a basin, and high volumes of water are applied in order to achieve an even, rapid ponding.

This is a self-propelled sprinkler. A single pipeline is supported by a suspended row of mobile towers 2–4 m above the ground. Water under pressure is pumped into a pipe that slowly rotates a pivoting tower, resulting in a large circular area of ground being irrigated. Graded nozzles are used to ensure even distribution as the system moves along.

A series of small of light-weight pipeline sections moved manually to achieve successive irrigations. Pipelines are lateral and are connected to a mainline. Labour intensive.

Stationary sprinklers with fixed water supply pipelines (below soil surface) and nozzles above the surface

A large sprinkler mounted on a wheel or trailer. Water is fed via a flexible rubber hose. Selfpropelled while applying water, and travels in a line guided by a cable. This system requires high operating water pressures.

Large diameter wheels mounted on a pipeline enable a line to be rolled as a complete unit to successive locations across a paddock. The pipeline is around 1 m above the surface of the ground.

Similar to centre-pivot systems, except the lateral line and towers move in a continuous straight path across a rectangular paddock

Small-diameter tubes situated either above or below the soil’s surface. Slow but frequent applications of water are delivered via small holes (emitters) and targeted directly to the root zone. A network of main, sub-main and lateral lines supply the emitters with water. This means of delivery of water minimises the effects of evaporation and also eliminates run-off and deep percolation. Can be easily combined with fertiliser application in the process called ‘fertigation’.

Flooding with ridges as guides

Flooding a level basin

Centre-pivot sprinkling

Hand-moved sprinkling

Fixed sprinkling

‘Travelling gun’ sprinkling

Side-roll, wheelmove sprinkling

Linear or lateral move sprinkling

Drip-feed and trickle sprinkling

Source: Based on Victorian Government Department of Environment and Primary Industries (2014).

A series of shallow channels used to guide water down a slope across a paddock. Channels are typically straight but can be curved to follow the contour of the land.

Description

Furrowing

Irrigation system

Table 6.2.  Types of irrigation systems typically used for agricultural production in Australia

Presently used In orchards, vineyards, high-value vegetable plots. Significant potential for many crops. Experiments are underway in sugar-cane fields.

Regular, rectangular paddocks

Various crops are suited

Broad-acre crops on flat land

Orchards and vineyards for frost protection and cooling

Small farms and irregular areas of large farms

Cotton is one of many examples

Rice

Orchards, vineyards, pastures and grain crops

Row crops such as cotton grown on beds

Type of farming

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weed growth. There is much reduced downstream flow of pesticides, fertilisers and soil erosion. This is because there is far less water flowing over the irrigated field. Of course, heavy rainfall changes that. However, maintenance could end up costing more than for some of the other systems. If the system is an underground one, any maintenance of the distribution lines and emitters involves considerable work and the cost of flushing materials.

Irrigation efficiency: concepts The two main variables concerned with overall water availability – climate and consumption – have created the need for greater water efficiency and improved farm management strategies. Specific definitions of water use efficiency (WUE) depend on the purpose of the measurement, the available data, and who is doing the measuring. The conventional measure is yield (of crop, animal weight, etc.) per unit of irrigation water. On the other hand, economists have a specific definition of ‘efficiency’ based on ability and willingness to pay for irrigated water. Willingness to pay is a function of the price the farmer expects to get for his/her produce. This means that some form of water use could be highly efficient in terms of output per unit of input, but not be economically efficient if the added value of the farm product does not justify the expenditure on extra water. Put in simpler terms, from an economic perspective the value of water is ultimately determined by the demand and supply for the farmed product. The question then becomes whether farmers can sell their product at a price that justifies the investment in more costly water. The demand for water is an ‘intermediate’ good, using economic jargon. So is fertiliser, and in both cases the economic considerations are the same. It is difficult to separate changes in water use arising from the implementation of waterefficient practices/technology from changes due to year to year variations in seasonal conditions, changes in cropping mix, water prices and water availability. Inter-annual variations in water application rates reflect the water requirements for individual crops as well as the response to rainfall variability and climatic conditions, which determines water availability and the price paid. As a consequence we cannot calculate the marginal value of water except on a case-by-case basis. If the economic value of water is estimated in aggregate, say for a catchment, we need as data input a significant variation in water use over a season or number of seasons such as happens with drought. We can then estimate the value of water in a ‘with and without’ situation: the selling price of crops or stock in a drought year versus the higher prices in a year of normal rainfall. An individual farmer could undertake the same exercise for his/ her farm, and benefit from the results.

Motivation for change Stressed water assets, a highly variable climate, and the prospect of long-term impacts of climate change have amplified awareness that water is not only becoming scarce, but is also often degraded and in need of radically improved management. In response to threats to water security there has been an increased focus on improving water use efficiency onfarm, as well as introducing market-based approaches (water pricing), along with fair and science-based allocation policies. The Australian Government and individual state governments have put in place various legislative approaches with the intent to address these issues. In addition they have provided funding to assist irrigators become more water efficient. This is progress. However, the major question is how to get increasing numbers of

6 – Climate, rainfall, dams, bores and irrigation

farmers changing over to technologically efficient drip irrigation. This is the question we posed above. The push towards change, notably in the past decade, has been due to compounding factors resulting in dramatic decreases of water availability. However this was not universal across the nation. Water availability in Australia is far from uniform, but is somewhat more predictable than generally thought. It is simply that that when we go to bed in Melbourne we don’t know whether it will be rain, shine, hail or drizzle when we wake up. We know it will be one of these. Probabilities can be assigned to the likely weather possibilities in Melbourne. In most parts of the nation the variability is much less and probabilities can be readily assigned. The Wet Tropics in Far North Queensland is wet year-in-year-out. It rains in summer, autumn, winter and spring. Of this we can be certain. Melbourne and its surrounds experience very changeable weather, with considerable variation day-to-day and year-to-year. Then there are ‘near certainties’; for example we can expect reasonable snow falls in the Kosciuszko region on a yearly basis. We can assign probabilities to the water flow in the Todd River at Alice Springs (very low probability for most of the year). Recognising that this is a diverse country with a wide variety of climatic conditions is a starting point in understanding the use of agricultural water in Australia. Farms differ. The size and financial performance of each farm, the type of commodities under irrigation, and the age and type of irrigation infrastructure in place (on- and off-farm) all vary, and therefore the need and motivations for change will differ from farm to farm and region to region. We seek water-use efficiency in a world that is difficult to model. The challenge irrigators face is in managing the uncertainty of rainfall, both on a short-term and long-term basis. The approach irrigators adopt to such a challenge, and the specific measures they take, have far-reaching impacts, and not just on the individual farm. Effects can be felt throughout regional communities if new water-provision infrastructure is installed; furthermore economic growth on all levels (regional, state and national) can be influenced by the decisions on water-use that are made by upstream enterprises. There have been outcomes to celebrate and outcomes to deplore. The Snowy Mountains multi-purpose water scheme (hydro-electricity and irrigation) made the large area it irrigated Australia’s ‘food bowl’. The Ord River scheme has, on economic terms, failed, yet there is still belief in its potential. Many smaller irrigation systems have been a success, although the arguments about their relative cost and benefits don’t subside.

Farm investment Since the expansion of irrigated agriculture in the 1980s, the agricultural sector has gone through a process of steady change. Investment in irrigation infrastructure was made at a time when water was considered abundant and obtainable at a low cost. This was an incentive to over-invest. As more and more water allocations are priced, and markets for water developed, investment decisions are being made much more carefully. Investments on farms, more so than most other businesses, are generally made with long-term results in mind and based upon the expected returns over the life of the investment. In making investment decisions the farmer is likely to buy machinery or make farm improvements that increase the capacity to improve productivity, and in turn farm profitability. Investments such as drip irrigation systems involve large and virtually irreversible capital investments, and the economic benefits are spread out over many years, thus involving

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uncertainty. Still, as long as farmers can be relatively confident that the reduced expenditure on fertilisers and water are justified, the incentive to change should exist. Uncertainty and the irreversible nature of certain types of irrigation investments may result in delayed implementation or rejection of water efficiency innovations. Whatever investments are made on a farm, there are a complex set of future unknowns. The income of farmers is affected by fluctuations in commodity prices, cost of farm inputs, climatic conditions, and the occasional extreme weather event. In combination, these factors make farmers conservative. They also limit a farmer’s ability to fund investments in water efficiency. In a nutshell, it is likely to take encouragement by governments – probably including some degree of subsidy – to get the optimal level of economically efficient irrigation.

Changes implemented Despite the compounding issues that can restrict new investment, many farmers have sought to improve their irrigation practices. In 2008–09, 54% of farmers who irrigated stated they had made one or more changes to their irrigation practices. The most common changes involved introducing a wider range of irrigation systems, improving scheduling, and reducing the area under irrigation. These reported changes suggest that improving irrigation is being taken seriously. Yet Australia lags well behind the United States (a country with much similar agriculture) and several others in the installation of drip irrigation. Not only are farmers involved, but water-supply infrastructure owners are playing their role. As off-farm delivery losses of water are up to 20%, the repair of irrigation channels or replacing them with piping can significantly reduce this cost (Australian Government Department of the Environment, Water, Heritage and the Arts 2009). Back on the farm, land forming can improve the on-farm efficiency of flood irrigation. Likewise, less efficient methods such as overhead sprinklers can be replaced with low-level sprinklers. Rather than relying on their own knowledge or observations, farmers can apply science and scientific tools to management; for example, better scheduling and timing of water application based on evaporation figures, climate data and soil probes that indicate when best to irrigate. It is not surprising that the benefit of using less water to achieve the same level of production is attractive to farmers. The question remains: to what extent are some farmers lagging in using less water and managing run-off? The sequential question is: what else can be done to entice all farmers to become more water-wise? There is a further question: how, if at all, can even more efficient systems and practices be developed and introduced? Economists will be quick to suggest financial incentive will do the trick. The fact that there has been, and continues to be, inefficient water use indicates the existing disincentives are not strong enough to reduce water waste. Ignorance also plays a part. The latter could be addressed by what we used to call ‘farm extension officers’, technical experts employed by governments, who would visit farmers and provide information on state-of-the-art agricultural methods. More dams During the period when we were researching this book, the Australian Government released its Agricultural Competitiveness Green Paper. In this there is a list of new dams that could be built. The Green Paper refers to them as ‘potential water infrastructure projects’ that could warrant Commonwealth involvement of some form or other. Whether or not this means taxpayers’ money is not made clear, but it would seem so. Six dams (five in

6 – Climate, rainfall, dams, bores and irrigation

Fig. 6.2.  Northern Australia, showing the extent of seasonal savannah and land suitable for agriculture.

Tasmania and one in Victoria) are in a ‘most likely’ category. Three that are ‘for consideration’ are in north Australia: an extension of the Ord River irrigation scheme; a dam plus related infrastructure in the Gilbert and Flinders rivers region of the Gulf of Carpentaria; and a scheme on the Mitchell River (again in the Gulf). The map in Figure 6.2 serves numerous purposes. First, it indicates a realistic boundary for ‘Northern Australia’, by suggesting that the so-called ‘seasonal savannah’ is north of the line. Second, it indicates what land is suitable for agriculture. This is shown as the dark colour. It is a relatively small area by Australian standards. It refers to the potential for more intensive agriculture than the existing extensive grazing that is the present land use across the whole area. The Gilbert, Flinders and Mitchell rivers flow west to the Gulf. Much time is likely to pass before decisions to go ahead or not are made on any of these new dams. One of the fundamental issues is: who pays for the construction of the dams and associated infrastructure? There is no objection from an economic perspective if governments pay, own and operate water infrastructure. However, there must be a question mark as to the prospect of this happening. The economic question: is the value of the water (to the user) equal to its cost of provision? The ‘user pays’ principle suggests that unless the cost of provision is zero the user should pay something, and this means the farmers who take up the water. Would farmers find it worthwhile to fund the storages and their related pipelines and channels? There are also yet to be resolved matters as to the externalities that generally result from the operation of dams. The case of the degradation of the Great Barrier Reef has been highlighted, and will be discussed in more detail in later chapters. The question of the optimal ‘environmental flow’ has eluded Murray–Darling Basin decision-makers for

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decades. All dam construction and operation results in some downstream costs and possible downstream benefits. The Gulf of Carpentaria rivers play a crucial role in the lifecycle of prawns that are harvested offshore. Flooding during the wet season is necessary to flush out the juvenile prawns. This is the country’s major prawn fishery with much product exported, and the fishing industry is very concerned that a major dam would alter the flow and make a substantial difference to its profitability. Then there is an even more basic question: who owns water? If it falls on a person’s land, does that person ‘own’ it? Some Australian parliaments say ‘no’. This makes sense from an ecological perspective. As no one person (or nation) can own the atmosphere, no one person (or nation) can own the hydrosphere. One person, a few, or many, can adversely impact the quality of water as it passes through their land, making it a problem for those downstream, at least until nature has made it pure once again. We can wait a long time for that.

In conclusion: utopian dreams must not trump science There will always by utopian dreamers, the best example in the water field being Dr John Bradfield, who died in 1943. In 1938 he put to the Queensland Government a plan to divert the east-flowing Johnstone, Tully, Herbert, and Burdekin rivers into the westward-flowing Thompson and Flinders rivers. The diversion would take the tropical monsoon waters west rather than east through the banana and sugar-cane areas of north Queensland. Once in the Thompson River, he argued, the flow would continue all the way south-west to Lake Eyre. Evaporation on this very long journey in hot and dry outback Australia was seriously underestimated by the good doctor. Flows were over-stated. He only saw benefits – and significant ones they were – when the waters entered Lake Eyre. Bradfield argued that the climate in the Lake Eyre region would change from minimal rainfall to high rainfall as a consequence of his predicted immense inflow of water. This was a highly unlikely result, contrary to a scientific analysis. Australia’s inland would not become a virtual Garden of Eden as this naïve dreamer thought. To this day there are those who believe in Bradfield’s plan. Scientists, economists and engineers suggest we keep refining our irrigation systems before we do anything else. There is a serious economic question to be answered: what are the comparative benefits of a dollar (let us be realistic and say a billion dollars) spent on building new mega-dams versus spending the same sum on wide-scale installation of surface or sub-surface drip irrigation? Of course, dams would still be required if drip irrigation became a standard practice, but one would expect much smaller and less expensive ones. The rather dramatic increases in knowledge, development of better measurement tools and weather forecasting have changed water-use practices in many of our farming communities. Even old-timers are likely to have abandoned ‘do-it-yourself’ weather forecasting. Relying on the increasing height of an ants’ nest has given way to the weather maps produced by the experts in the Bureau of Meteorology.

7

Soils and underground critters S. Cantwell

Introduction Eighty years ago, in April 1935, an ominous wall of blowing sand and dust swept across the Great Plains caused by years of overplanting, poorly managed crops and severe drought conditions. During these massive storms, people were forced to crawl on hands and knees in search of shelter, literally unable to see their hands in front of their faces. Cars stalled and stopped in the choking dust. Many thought the end of the world had come. Jane Hardisty (The Farmer’s Exchange, New Paris, Indiana, 24 April 2015) thus described the ‘Dust Bowl’ in Oklahoma and Kansas that started on the newly ploughed American plains and went on to choke much of the country in the east. Soil is essential for the life of all things that grow in the ground and those that consume what grows in the ground. Ground and water are the most obvious building blocks for life on Earth. We walk on the ground. We pick fruits from the trees and shrubs that grow in the ground. After the rain new spurts of life appear from the ground. Of course, more than soil and water are needed for life on Earth; nothing is more essential than the sun and its role in driving the whole system. But to describe the totality of the planet’s life-support system is another book, in fact many books. Soil warrants its own story. Australian soils are a sub-set of the planet’s soils, and are our subject matter.

How soils form Soil is formed from the erosive forces of the power of the sun combined with the movement of ice, water and wind on the rocky skin of the Earth. The sun changes rock by heating its surface, while the cool side lies under the ground. After heating during the daylight hours and cooling at night over spans of geological time, the outer layers of rocks eventually begin to flake off. Water freezes in the cracks of rocks and, acting as a wedge, expands to make the cracks wider, eventually splitting rocks completely. And then the movement of water as it falls and washes over the ground causes friction that wears rocks and stones away when they 103

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rub against one another. Such, in a nutshell, are the physical processes that initiate the formation of soils. Only chemistry is missing. Carbonic acid, a very mild acid created by the combination of raindrops and carbon dioxide in the air, corrode the surfaces of rocks. Here we have the combination of chemical and physical processes producing ever-smaller stones, rocks, pebbles, grains of sand and tiny fractions of grains. We are talking erosion. Wind is the most noticeable erosive factor when the grains are small. Water continues to play its role. As wind blows it scrapes and carves smooth surfaces, removing small particles along the way. As water cascades down streams it carries the small particles easily. Soil and sand are being formed by these processes. However, the physics and initial chemistry of soil creation is only a part and start of the story. Soils need organic compounds to add nutrients to the ‘once-were-rocks’ fractions to support various forms of life as they feed on and in the soil. Decomposers in the soil, generally hidden from the human eye, turn organic matter into useable substances for plants to live on. Water and sunlight remain essential throughout the process.

Nutrition in the soils Plants need nutrients to grow, and in particular they need the elements found in the soils. The major elements are nitrogen, phosphorus and potassium. These alone are not enough. In addition they need calcium, magnesium and sulfur, as well as trace elements. It is the rare Australian soil that is not deficient in one of more or these. To remedy this, farmers apply synthetic fertilisers. Before the discovery of techniques to formulate these fertilisers, nature did the work of building up soils and replenishing them via the manure of animals and the decomposition of dead plants and animals. Although the application of artificial fertilisers is effective from the perspective of agricultural production, it can cause serious environmental damage, particularly if excess nutrients find their way into off-farm ecosystems that do not tolerate them. Then there is the economic law of diminishing returns doing its best to reduce the benefits of applying fertilisers. Increasing quantities of fertilisers will be needed as time passes and less and less of the natural nutrients remains in the soil.

The key chemicals Nitrogen is a key element in plant growth and often needs to be added because it is depleted when crops are harvested. Phosphorus aids in energy transfer from the sun to the plants, as well as stimulating early root and plant growth and hastening maturity. Australian soils are often lacking in phosphorus as well as nitrogen. The role of potassium is to increase disease resistance, and it helps plants to form and move starches, sugars and oils. Calcium is needed for root health, in particular growth of new roots and development of leaves. Magnesium is the key component of chlorophyll and is vital for photosynthesis. Sulfur is involved with energy-producing processes in plants and is responsible for many flavour and odour compounds. In addition to these elements, plants also need small doses of trace elements (iron, manganese, copper, zinc, boron and molybdenum) for healthy development. Tiny creatures in the soil The tiny creatures in soil are bacteria, protozoa and nematodes. It is estimated that one tablespoon of healthy soil contains more bacteria than there are humans on the Earth. Not often discussed in the day-to-day conversation about soil is what hides beneath the surface, the ‘critters’ and ‘creepy-crawlies’ that play a basic role in making soils productive.

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There are numerous insects, most without common names; there are centipedes, cockroaches, earthworms, mites and beetles. These small invertebrates are generally lacking in pigments, making them pale or whitish. Many lack eyes because eyes are useless underground. To compensate for not having eyes, other senses such as touch and smell are heightened. The critters and creatures in soil have the task of decomposition, breaking down the soil into its constituent parts and thereby liberating nutrients for plants to access. Just as we conceptualise, and experience, food chains on top of the soil, we need to understand that there is a hidden food chain under our feet. At the bottom there are various forms of organic matter and metabolites from plants, animals and microbes. Next come the root-feeding nematodes, mycorrhizal fungi and bacteria, followed by arthropods that shred material and nematodes that feed on fungi and bacteria and protozoa. Finally, there are predator arthropods and nematodes. Above them the sky is visible, and birds plus little land-based creatures feed. Despite the abundance of creatures in the soil, very few humans see them unless time and effort is put into a search. One who spent enormous amounts of time studying a soil creature (doing so by putting his ear to the ground to listen to their work) was Charles Darwin. He found time not only to change our understanding of life on Earth, but also to write a book on earthworms! In the present era, we are capable of the unintentional damage to soil critters through the use of strong pesticides, herbicides and other chemicals. Without the untiring work of these invertebrates our soils are motionless and not productive. We are gradually starting to realise this and there is evidence of changes in farming practices. These practices go by a variety of names, but as a group we can call them ‘natural farming’; some farms become certified as ‘organic’ although more than just keeping soils naturally healthy is entailed in obtaining certification.

Organic matter and humus The organic matter that is contributed by plants and animals helps form the physical and chemical properties of soil, providing the essential conditions for the survival of the plant and animal life that depends on the soil. Here is nothing but a simple cycle of life, death and life in the soil. Under natural conditions organic matter is the main source of elements such as nitrogen, phosphorus and sulfur, all of which are essential for plant growth. Organic matter can hold up to 20 times its own weight in water, obviously a significant attribute to have in drought-prone areas, and it stores water in floods. Then there is carbon. Organic matter contains the carbon-based molecules that are ‘the fuel’ for living plants. Organic matter means porosity, water-holding capacity, earthworms, insects, nematodes, bacteria and fungi. The structure of soils, called ‘tilth’, or what you and I might term ‘crumbliness’, is fundamental to agriculture.

Soil properties The combination of organic matter, humus and mineral particles in partnership with the decomposers and the invertebrate ‘recyclers’ is responsible for the formation of soil aggregates, the structure of the soil and its fertility. Soils are described according to six layers, called horizons. These are O, A, B, C and R, where R is bedrock and A is humus. What we commonly call ‘topsoil’ and ‘subsoil’ are where plant roots penetrate. Humus is plant material that is hard to break down and remains after the organic matter has been digested. Humus binds the positively charged compounds and elements in the soil, called cations, and by doing this prevents them from being leached. Humus in the

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soil helps form structure. Home gardeners know this and find it easy to produce humus on a small scale; it is more difficult for farmers with their large cultivated fields. The structure of a soil is extremely important to plant growth; for example, sticky, structureless clay soils are practically impermeable to water and this leads to saturated soil which is not conducive to growing a variety of plants, while sandy, structureless soils can lose water rapidly and starve plants that rely on retained soil moisture. In between these two extremes is a vast range of soils that are productive with the right amount of care. Soils must have an appropriate mix of air, water, organic matter and humus, essential nutrients and decomposers as well as a good structure of soil particles in order to be suitable for cultivation. Once we take into consideration the characteristics of good quality agricultural soils and the effort required to assess a particular paddock, we can begin to understand just how complex and difficult it can be to locate the appropriate soil for a particular crop. Farming can be unrewarding and frustrating when the wrong plant for the particular paddock is sown. The selection process was hit or miss until fairly recently, but now if a farmer can afford agronomic advice or just basic soil testing the benefits are there to be had.

Carbon in soil Soil carbon is a major topic and one that is likely to be a fundamental feature in our developing understanding of the carbon cycle, particularly in relation to carbon sequestration. Here we stress that the amount of carbon in the plant’s soils is estimated to be more than the amount in the atmosphere and all plants combined.

The loss and replenishment of soil nutrients Erosive forces, in particular wind and water (the latter as heavy rain or fast-flowing surface water), cause nutrients to be lost from topsoils. This is where humus comes into play. It aids in binding nutrients, which prevents them from eroding. Earthworms and numerous other burrowing invertebrates are continually moving the nutrients and recirculating them to the topsoil. As noted above, farmers can unintentionally interfere with this process by spraying pesticides that can render the soil uninhabitable for particular soil creatures. Ploughing can have other adverse effects by breaking down the soil structure so that the small particles become vulnerable to erosion. The harvesting of crops takes nutrients out of the soil. These need to be replaced before the next crop is planted. In what we can call traditional mixed farming, where cattle or other livestock grazed on land that would be subsequently ploughed to grow crops, livestock manure played a crucial role in maintaining soil nutrients. In modern farming broad-acre cropping occurs, and cattle and sheep are grazed in unrelated distant lands. No manure falls on the cultivated fields. There are exceptions where farmers graze animals on the harvested field, but only small parcels of land are involved. The lack of a constant supply of animal manure has required new strategies by farmers. The common one is to rotate paddocks; for example, by planting legumes after the harvest of the grain crop and before the next one is sown. The common legumes are soybeans, alfalfa and clover. They add nitrogen to the soil, but remove calcium, phosphorus and potassium. It is not just cultivation that removes valuable nutrients from the soil. Livestock also remove elements from the soil as the animals consume the grasses and whatever else they eat. However, in this case we are likely to witness the replacement of at least some of the nutrients as the animals spread manure.

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Fertilisation Soil types and their chemical composition vary across the nation. This and the intended agricultural use of the land determine what fertilisers are required and in what quantities. Here are some examples. In the southern part of Australia in areas where soil moisture is seasonally or continuously abundant, agricultural productivity is governed by a requirement for phosphorus. In these areas there is likely to be a need to apply sulfur and an increasing need for potassium. In wet tropical and subtropical areas, synthetic fertilisers are applied to add essential growth nutrients such as phosphate, potassium and nitrogen to the soil. In most cultivated areas the application of superphosphate is necessary to supply phosphorus. The exceptions are the few black soil areas of the nation. The black soils of south-east Queensland are some of the best quality soils in all of Australia, with the highest yields and most balanced composition. There are other good quality black soils in the nation but the Darling Downs has pride of place (see Box 7.1). The downside of the application of fertilisers is that any excess seeps into groundwater, flows into streams or rivers, and consequentially ends up in wetlands or the ocean. In freshwater environments the excess nutrients from run-off stimulate the growth of algae. In central and northern Queensland, the Great Barrier Reef is being adversely impacted by nutrient run-off. Emphasised throughout this book, this result is an economic externality – in other words, once the run-off leaves a farm it is not the farmer’s business and any downstream damage it does is not an item on the farmer’s profit and loss balance sheet –

Box 7.1: The soils of the Darling Downs The Darling Downs region in south-east Queensland, just west of the Great Dividing Range, has been described as four million acres [16 million ha] of the richest soils in the world. This country has a long history of European settlement and farming because of its top quality soils. This was discovered as the explorers, squatters and settlers moved through Cunningham’s Gap and over the Great Dividing Range. The black soils of the Darling Downs are classed as vertosols because they have the ability to crack and swell depending on moisture; they can form small ephemeral lakes known as gilgai. The soils are high in fertility and hence used extensively for cultivation. Constantly changing is the farm environment of the Darling Downs, having 6500 dairy farms in the 1930s peak; now dominated by vast fields of grains with beef cattle grazing in the less fertile areas. Very few sheep stations are left. The Darling Downs was, until the decline of the wool industry in the late 1960s, sheep and wool country. A reminder is the Jondaryan woolshed built in 1859. The shed had 52 shearing stands. Today it is a heritage-listed tourism venue where one can sleep rough in a genuine shearers’ quarters. Also changing is the Condamine Alluvium, a mass of underground water that has been decreasing since the first bores were sunk. The Condamine Alluvium covers ~8500 km and is currently used for irrigation, industry, stock and domestic purposes. There are restrictions on the amount of water allowed to be extracted due to the decline in the underground water level. The Darling Downs region has its environmental-cum-agricultural issues, the main one being serious concerns about the impact of coal seam gas extraction on underground water.

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and it does feature as an economic loss to someone; in the extreme case, tourists no longer visit the Great Barrier Reef and the tourism industry suffers. There are alternatives to using synthetic fertilisers but these are difficult to use on a large scale. So-called ‘green manure’, which can be oats, rye, mustard or legumes planted in the fields after the main crop (such as wheat) has been harvested, is one such solution. These plants grow quickly, protect the soils from erosion by wind and water, and also take up remaining nutrients from the fertilisers. Plough these crops back into the paddock and they act as manure. Another strategy is to apply compost, mulch and animal manure to the field, but this is suited only to small-scale farms with high-value products that can justify the significant labour involved. With a few exceptions, Australian farms are so large that this method of retaining soil quality is uneconomic. Without fertilisers much of Australia’s farmland would not be cultivated. For example, areas where soil moisture is high although not excessive, such in the southern part of the continent where there are good winter rains, there is a virtually universal need to apply phosphatic fertiliser. Both sulfur and potassium are required in much of this country. In the northern subtropical and tropical sugar-cane country along the Queensland coast, also with good soil moisture due to summer rains, nitrogen plus potassium and phosphatic fertilisers are commonly used. In the wheat-growing areas, where seasonal rainfall is reliable and generally of a short duration, the planting season is centred on the weather; both crop rotation and the application of superphosphate are features of wheat farming. The exceptions are the black earths as found on the Darling Downs. Then there are the vast semi-arid and arid areas. On these there is no place for fertilisers, hence no sown pastures or arable agriculture. It is not just the miserable soil that is the problem, but also the meagre and unreliable rainfall; and when bore water is available it is too saline for use on cultivated fields. As we have mentioned and will discuss in some detail in coming chapters, we do make good use of this near-desert country. It pays its way in economic terms without any costly attempt to improve it.

Soil management Farming practices can reduce surface run-off and deep drainage, and can slow rates of acidification and the decline of carbon within the soils. As various methods of irrigation have been discussed in the previous chapter and fertiliser application is discussed throughout book, only one example is presented here, with the aim of illustrating that there are solutions to protecting soils and countering off-farm environmental impacts. Where the type of irrigation causes surface run-off (or where seasonal flooding of paddocks cannot be avoided) and fertilisers are washed away with fine sediment, this can be avoided by forming contour banks and retention dams and by blanketing the cultivated paddock with green trash, for example the leaves and tops of sugar-cane left on the ground as a trash blanket after harvesting. Contour banks direct water on a horizontal plane, and as a consequence it seeps into the soil. They also direct water to designated areas on the farm (such as a retention dam at the bottom of a cultivated paddock). This avoids run-off into neighbouring properties, over roads, and into water courses, which have the propensity to deliver pollutants to the sea where the ultimate damage is done. The construction of contour banks and retention dams allows water to be recycled back onto the crop through pump and pipe systems. A problem with this is that it is expensive. Not only has the cultivated paddock to be contoured and a retention dam built but a pump and pipes also have to be bought and installed to return the water to the top of the field.

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From an individual farmer’s perspective there are benefits if he or she has paid for the water, because less is used. Water is returned to the top of the paddock to irrigate the field for a second time as it flows down the paddock once more. The off-site benefits are likely to be substantial.

Managing erosion Erosion management can be approached in various ways, depending on the type of farming involved. Maintaining trees and ground cover is the most effective method. This is easy to comply with on extensive grazing properties. Tree roots stabilise the soils; however there also needs to be ground cover, grasses and small plants, to protect sloping grounds from erosion. Think about sugar-cane farming. Here the practice of ‘green cane’ harvesting leaves the stalks on the ground. When the seasonal monsoon comes it no longer pounds and easily disturbs bare soil to carry it to the Great Barrier Reef. Zero tillage and strip cropping are parts of a new approach that is proving effective. Grazing lands present different problems and have different solutions. Planning where cattle and sheep graze or are prohibited from grazing is important. Consider these problems. After rain, water tends to concentrate in livestock tracks, fence lines and alongside roads. These areas are often bare. Thought needs to go into where roads (often nothing more than dirt tracks) are laid out. Fencing can do much to control the movement of cattle and sheep. The riparian zone is the area most needing protection by fencing it off. This is becoming common practice. Overgrazing is the classic soil-degrading process. It inevitably leads to soil erosion. Ensuring 30% as a minimum ground cover is the general rule of thumb in grazing country. This means determining the number of cattle or sheep to be run per hectare according to the land’s natural vegetation and the amount eaten per animal. It requires that land cover be monitored on a seasonal basis. Retaining 30% ground cover over the span of a five-yearlong drought demands a dramatic decrease in stock, whereas in a season flush with grass the rule permits a similarly dramatic increase in stock. This accommodation of nature is the art of successful grazing.

Australian soils: a classification Having outlined the formation of soils and some of the crucial management issues facing Australian farmers (and those downstream of farms), we turn our attention to the formal classification of the major soil types in Australia. The country’s endowment of soils, old and eroded as they are, plus rainfall, or lack thereof, are the major determinants of what we can grow and graze in Australia. Of course, as discussed above, we have discovered how to intervene by artificially returning nutrients to the soils and we have discovered the difference that controlling water can play. Yet to achieve sustainable results we need to know the base material we are working with – our soils. A succinct summary of Australian soils is provided by the ABS (1966). The report introduces the subject thus: The soils of Australia constitute one of her greatest natural resources. Spread over a continent of nearly 3,000,000 square miles [7.8 million square kilometres], of which one-third lies within the tropics, they include soils developed on a wide range of rock types and under climatic conditions varying from the alpine zones of south-eastern

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Fig. 7.1.  Land suitable for cultivation and improved pastures east, south, west and north of the line.

Australia and Tasmania, through Mediterranean zones of southern and south-west Australia and the wet and dry tropics of Queensland, to the very low rainfall areas of the centre. There are 14 different types of soils in Australia according to the Atlas of Australian Soils developed by CSIRO. Below we shall use a less formal description of the nation’s soils. In Fig. 7.1 the line drawn down the eastern side of the continent, including much of the north and parts of east Tasmania, heading west in proximity to the NSW–Victoria border into the eastern half of South Australia and finally encapsulating the south-east of Western Australia, indicates the limit of cultivation and improved pastures in Australia. In the north of the nation the line is broken. Land here is deemed to have potential for the production of crops and the development of pastures. The Ord River Scheme is in this area, as is the Gulf of Carpentaria land which is subject to a high degree of interest for irrigated agriculture. Only a few soil types are naturally suitable for cultivation, mainly the black soils that are rich in moisture and nutrients. The black, cracking soils of the Darling Downs and central Queensland need no more than one good wetting to retain soil moisture for the growing season. Other poorer quality soils that are cultivated require the application of fertilisers and, where rainfall is insufficient for the type of farming proposed, irrigation. We only need to consider the vastness of Australia to realise that most of the country’s soils are not amenable for cultivation except at huge cost. Figure 7.2 delineates the Mitchell grass area which is prime grazing country. Imagine providing a constant flow of water to the region around Alice Springs. Calculate the cost of bringing the soils there to a nutrition standard to grow foods as in the Murray Irrigation Area. Some have dreamt of doing this, if not for ‘The Alice’ then further

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Fig. 7.2.  Area where Mitchell grass grows. The banana-shaped area is Mitchell grass country.

south in the Lake Eyre region. We are referring to the semi-arid and arid parts of Australia. These areas provide sparse natural vegetation, only lush after a significant, but sporadic, wet season. This type of country with its relatively poor soils is a large part of the nation, but it is not wasted from an agricultural perspective. It is the basis of extensive grazing. This is a profitable pursuit, except if droughts persevere for too long. It produces much of the premium-priced certified organic beef in Australia. Where there are not beef cattle, strong-fibre merino sheep go about producing wool for export markets. Bore water is the saviour of the vast Australian inland. The occasional permanent water-hole is a god send, and in the years when the floods turn the Channel Country into an inland sea the whole nation pays homage to the rain gods (or the Thunder God Thor). By reference to the continuous line drawn in Fig. 7.1, in the parts of the eastern states west of the line we are into savannah, Mitchell grass country, some mulga country, then moving further west into the semi-arid, near desert country. In the south, the poor soils are to the north of the line; in the west they are to the east. As noted previously, there are ten named deserts in Australia, virtually useless for farming; even grazing is impossible in these dry and formidable areas. Using common terminology, we will discuss a small number of soil types for the purpose of illustrating the varied nature of Australia’s soil landscape. We should note that farmers and those who sell farm properties rely on everyday soil descriptions, not the technical ones of the scientists. They will describe the soils, for example, as ‘undulating basalt’, ‘red soil’ or ‘black soil’, or by what grows on the soil, for example, ‘Mitchell grass, mulga, box, gidgee’. These descriptions are more informative to the farmers than the scientists’ classifications. What we use next is a good compromise between scientific formality and farmer convention.

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Our soil characteristics Many years ago, the ABS published The Soils of Australia. It was prepared by staff of the Soils Division of CSIRO (ABS 1966). To this day it remains an excellent summary of the nation’s soils. The article is summarised in Box 7.2. The above brief outline in Box 7.2 presents an overview of Australia’s soils. The soils are old, depleted and generally in need of nitrogen, phosphorus and various trace elements if cultivation is to take place. The younger soils, found along the river plains, are the most fertile. In ‘the West’, where the nation’s vast savannah lands and semi-arid and arid lands are generally in their natural state, there is ‘free-range’ grazing for cattle and sheep. This we can capitalise on. Several graziers in these areas (plus some outside this part of the nation) have taken the initiative and had their properties certified as organic. The result is that Australia leads the world in the area certified as organic. In fact, the state of Queensland has more certified organic land than any country in the world. Australia has just over 17 million ha of organic farmland, which is 40% of the global total of certified organic land. Argentina with just over 3 million ha is second on the world scale, the United States third at not much over 2 million ha, then China also just over 2 million (FiBL and IFOAM 2015). If the organic category ‘wild collection areas’ was included, this being land on which no farming as such takes place but indigenous people hunt and gather, Australia would be even further ahead. Wild collection data are only available for a small number of countries, Australia not being one. The massive size of Australia’s organic area could be further expanded by including its Exclusive Economic Zone (EEZ) where our wild-capture fisheries exist. Adding the EEZ virtually doubles Australia’s size. The vast bulk of Australia’s organic farming land is the grazing country in the southwest of Queensland. In other parts of the state where grazing dominates an increasing number of properties are becoming accredited. We discuss organic farm products in many of the chapters in Section 4. Here is an appropriate place to inject a personal touch to the book. Given our focus is a future where few will be farmers but most of Australia will be farmed, one of our young authors reflects on a rapidly fading picture of ‘the bush’. Sarah Cantwell, the author of this chapter, lives and works in Australia’s sixth largest city, the Gold Coast, yet she has everlasting memories of that part of her childhood spent in the Australian bush (Box 7.3).

When you think you can taste the soil We will close this chapter with a matter dear to the heart of Australian wine producers and their French counterparts. Having the right soil on which to grow wine grapes is a first principle in this industry. As we know, wines produced in France are called by the name of the locality in which the grapes are grown. The French are extremely possessive when it comes to the use of words such as ‘champagne’, ‘burgundy’ and the like. The French tell us that real champagne can come only from Champagne in France. This is due to what is known as ‘terroir’ which gives the unique flavour to wines from certain districts, in particular the so-called ‘minerality’ of a wine. In lay terms this means that one is supposed to be able to taste the minerals in the soil, which somehow make it from the soil into your favourite wine. That this can occur runs counter to the scientific evidence: first, minerals have no taste with the exception of sodium chloride; second and more bluntly a scientist tells us: ‘The idea that you can taste minerals from the soil is absolute rubbish’ (Smith, quoted in New Scientist, 9 May 2015).

7 – Soils and underground critters

Box 7.2: ABS’s soil types The ABS uses mix of geography, convention and soil colours to classify Australia’s soils. We follow its schema. Seven overarching categories are differentiated. These are in most cases further subdivided. Stony and shallow soils: rocky country almost devoid of soil, usually shallow, leached, mildly acid, low fertility and sparsely vegetated: covering a large part of the Northern Territory and Western Australia (over 1.1 million square kilometres or oneseventh of Australia): extensive (sparsely vegetated) cattle grazing or empty. Sheep might have been tried in an earlier period. Soils of the alpine and perhumid zones: peats, alpine humus soils, peaty podsols, highly organic surface horizons, extreme acidity, excessive moisture: common to the Australian Alps and west Tasmania; no cultivation, seasonal grazing if permitted (was common once: refer to Banjo Paterson’s poetry). Soils of the humid zone, leached soils: acidic, swampy soils with peaty surfaces, drained for cultivation: moderately humid parts of Australia and include the lower Murray Valley: plantations of indigenous and exotic forests, sowed grazing pastures, vegetables, dairying. Soils of the humid zones, podsols: usually sandy, bleached subsoil overlying organic and ferruginous pans; pans can be indurated making root penetration difficult, temporary water tables form: with heavy fertiliser application develop into good pastures, in southern Australia exotic plantations after application of zinc, phosphorus and nitrogen: common on the coastal plains of south-western Australia, southern Queensland and New South Wales. Soils of the humid zones, podsonic soils: a clay subsoil beneath sandy to loam surface soil, more widespread than podsols and less acidic, respond to superphosphate and to one or more of the trace elements: major use is the development of pastures if annually top-dressed with superphosphate; and if potassium deficiency is addressed, growing of potatoes, cereals, some fruits and Pinus radiata plantations: widespread in Australia. Soils of the humid zones, krasnozems: deep friable red clay soils, can be strongly acidic, originally densely forested but exploited for timber and converted to intensive farms: fertility has declined and need superphosphate, respond well to molybdenum and potassium making them among the most productive soils in Australia: perennial pastures, temperate fodder crops, grains and vegetables (in the south), sugar, maize, peanuts and sown pastures (in tropical and subtropical areas): widespread. Soils of the humid zones, red earths and yellow earths: brown, grey or red brown surface horizons merging into red or yellow, massive but porous subsoils, acid and becoming more so at depth, deficient in phosphorus, nitrogen and trace elements: tropical fruits and vegetables and sugar-cane (on the coast): widespread. Soils of the humid zones, chocolate soils: brown with a friable clay surface horizon over a tight clay subsoil and floaters of parent rock throughout, moderately acid surface becoming neutral with depth, respond well to fertilisers: perennial pastures, vegetables such as potatoes and peas: on the basalt country of New South Wales. Soils on calcareous materials: shallow, neutral to alkaline soils on limestone, red (terra rossas) or black (rendzinas); the terra rossas are often rocky with outcropping limestone; the rendzinas respond to superphosphate and trace elements: have been

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extensively drained and now devoted to pastures (natural or sown); in deeper soils grapes and stone fruits grown: confined to south-east South Australia. Soils of the seasonally humid zones: rainfall is distinctively seasonal; summer rain in the north and winter rain in the south; the soils fall into two colour categories, red-brown earths and black earths, with the latter sub-divided into four subgroups (chernozems, solodic soils, red and yellow earths and lateritic podsolic soils). Red-brown earths: developed on slates, shales and granites, and on old alluvium now above flood level. They are grey-brown, loam to sandy-loam, surface soil overlying reddish-brown clay subsoil. Mildly acidic on the surface but diminishes with depth, calcium carbonate is present in deep layers. They are well supplied with potassium, calcium, and magnesium but always deficient in phosphorus and nitrogen: widely used for cereal growth in the winter rainfall areas of southern Australia, while in New South Wales and Victoria used extensively for irrigated pasture and horticulture. Black earths (chernozems): black or dark brown in colour and clay in texture, a granular structure on the surface, cloddy in the deep layers, slightly acidic to neutral on the surface, neutral to alkaline with depth, with a horizon of calcium carbonate concretions from 80 mm to 3 m below the surface; when wet they are sticky, when dry they crack (wide and deep). These are the most fertile arable soils in Australia, containing high levels of phosphate, relatively rich in nitrogen, organic matter is distributed through the top 2–3 m of soil: wheat, sorghum, lucerne, linseed, safflower, millet and maize are grown often in rotation in the summer rainfall areas, less so in the south were wheat can be grown many seasons on end with a short fallow. Only a small percentage of these soils are irrigated (the Namoi River cotton-growing area is a case of irrigation): occur on either side of the Great Dividing Range from central Queensland to Tasmania. Euchrozems: formed on the deeply weathered lower horizons of ancient laterites based on basalt; have a friable, dark reddish red clay loam on the surface, merging into a blocky structured orange to orange-yellow clay, with decomposing basalt at over a metre; have less phosphate than the chernozems but respond to superphosphate: have similar agricultural properties to chernozems: found in northern New South Wales and Queensland. Solodic and solodised-solonetz soils: grey sandy to loam surface, moderately strongly acidic, acidity falls in lower horizon; without fertilisers they are very infertile, deficient in nitrogen, phosphorus, potassium, molybdenum and trace elements: grazing is the primary use: occur in all states, particularly in the sub-coastal regions of Queensland where they form the bulk of spear-grass country. In the Springsure– Clermont–Emerald area of Queensland they coexist with black soils. Lateritic podsolic soils: light coloured sandy horizons, over a concretionary ironstone horizon, over mottled or white leached clay, mildly to strongly acidic throughout, weathered and leached; in their natural state carry heath and low mallee; strongly deficient in phosphorus, nitrogen and trace elements: where cleared they are sown with improved pastures: extensive areas in north Australia, in south-western Western Australia and in South Australia. Soils of the semi-arid zones: Solonised brown soils: deep, sandy to shallow loam overlying deep rubbly and powdery calcareous clay subsoils, neutral to alkaline on the surface, more alkaline at depth; the sandy soils suffer from wind erosion: the low-yielding wheat lands of

7 – Soils and underground critters

southern Australia, with a cycle of pasture–fallow–wheat, with superphosphate applied when growing wheat; sheep graze on the pasture; in proximity to the Murray River these soils are irrigated for horticulture (grapes and citrus): found in the low rainfall (winter) southern parts of Australia. Heavy texture grey and brown soils: uniform clays, grey to brown and mottled at depth, slightly acid, strongly alkaline at depth; moderate fertility, with variable phosphorus content; in Queensland and northern New South Wales they carried tall brigalow scrub (before much was cleared); wheat, natural pastures for cattle and sheep, rice in the irrigation areas of the Murrumbidgee River and the Murray River: occur in a great arc from the south-east of South Australia, through eastern Australia to the Barkly Tableland in the Northern Territory, small outliers in the Kimberleys; other specific regions are the Wimmera district in Victoria, the Namoi and Macquarie regions of New South Wales, the ‘brigalow belt’ in Queensland (in which top quality black earths and solodic and solodised-solonetz soils also occur). Red earths: not used for cultivation, covered with patchy scrub: sheep and cattle grazing: they comprise most of the wool and cattle land of south-west Queensland and north-west New South Wales, plus large areas of the Northern Territory. Soils of the arid zones: there are three broad categories; coarse-textured, desert sand hills and sand plains, prone to wind erosion; the arid red earths, stony desert soils and the desert barns (barchans), resisting wind erosion; the calcareous desert of the Nullarbor Plain. Desert sand hills and plains: long parallel dunes separated by inter-dune corridors (some narrow, some wide); the plains are on an undulating landscape; both dune crest and swale covered by deep sandy soil, mildly acidic, normally bright red in colour; in some locations with higher rainfall, the inter-dune corridors are covered with grey clay or loam and carry grass after rain, otherwise most of the areas carry spinifex and some drought-resistant shrubs such as mulga: much of this country is not suitable for grazing, the only possible industry: cover a wide area of central Australia. Arid red earths/stony deserts/desert barns: all are red/brown in colour, however each is different in texture; grasses and edible shrubs (mulga) except on the stony deserts which are virtually treeless; these are grazing lands: cover a wide area of Australia. Calcareous desert: shallow powdery soils, some shrubs: grazing land: Nullarbor Plain.

This is not to deny that mycorrhizal fungi play their part with wine-grape roots as they do with other plants. The fungi’s symbiotic relationship with plant roots helps them obtain nutrients. In this way fungi and soil bacteria do influence the chemical composition of grapes. The French will continue to make their case and Australian ‘champagne’ will remain ‘bubbly’ or ‘sparkling dry’.

In summary We have presented a broad picture of Australia’s main soil types. We have identified the regions suitable for crops, horticulture and improved pasture. Considerable parts of these areas are irrigated. Much of Australia is not in the good soil zones; it is either extensive grazing lands or desert.

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Box 7.3: Life in Trundle, New South Wales: Population 666 Sarah Cantwell My Nana owns a small farm just outside Trundle, New South Wales. A small town, Trundle is not much known for anything but it is the scene of many of my adventures as a youngster. Located among hectares and hectares of cattle farming and cropping land, my Nana’s farm was once home to my Mum, her two cheeky brothers, and their parents. Simplicity was key out there, using a bucket of water to flush the toilet and a sponge bath was common. Nevertheless I love that farm and every memory I have of it, from exploring the far corners and carefully treading along the walls of the dams to getting chased by the one wild ram. My stories nowhere near match those of my Mum tells of when she was a youngster. They would fill an entire book. From learning to round up the sheep in an old blue Ford to riding my trike down the driveway with Rex and Sally, the farm dogs, the farm was a huge part of growing up. There was an old see-saw out the back in the scrap metal pile that my brother and I loved. Scrap metal simply gathers and grows on Australian farms. We would go out there to play. Anything and everything was in the scrap heap, from old stoves to a variety of worn-out farm machinery, perfect for a child’s imagination. The best part about a hard day’s exploring was coming inside to the smell of a roast and sitting down in one of the many reclining chairs farmers felt at home in. My heart and my head are in the country; the corrugated dirt roads and the morning drive to get the paper will remain to be some of my best memories.

What is of fundamental importance is the productivity of both the enhanced land (fertilised and irrigated) and the extensive grazing land. Does it matter that hectares of land are required per beast in the poor soil country when the nation is able to feed its citizens and be a major exporter? Ultimately what will matter is the cost of replenishing soils if and where they are over-exploited. Most importantly, what needs to be recognised are the limits that nature has imposed. Australians can celebrate their success at farming but need to dampen the over-enthusiastic advocates of ‘more is beautiful’. Put science aside and assume we can turn the fast-flowing coastal streams of the Queensland wet tropics inland and that their water manages to reach the sandy deserts around Lake Eyre. What next? The human who believes that large amounts of summer rain on pure sand will turn it into a vegetable garden is yet to make contact with the rest of us.

8

Australian fisheries resources D. McPhee

Introduction All Australian states and the Northern Territory produce seafood from both the wild fishery and aquaculture. Aquaculture is divided into on-land seafood production (such as prawn farms cut into low land near the sea) and off-shore fish-farming in cages. In Australia the latter is dominated by the farming of salmon in Tasmania and the grow-out of tuna at Port Lincoln in South Australia. Fish farming off-shore is called mariculture. For brevity and in keeping with convention, we will use ‘aquaculture’ to refer to all forms of non-wild catch fisheries. Wild-capture fishing is the closest we get to hunting and gathering in the modern era. This makes people involved in fisheries unique in the 21st century. Aquaculture is comparable to feedlot farming of cattle, although in the case of oysters and mussels food does not have to be provided by humans. As the wild-capture fisheries, both in Australia and globally, are being fished to their maximum sustainable level (with a very small number possibly under this limit and some overseas ones beyond the limit), the increasing demand for seafood driven by population growth and change in diets will have to be met by fish-farming. A range of environmental conditions determines the species of seafood harvested gobally and their abundance. The species harvested in Australian waters are thus a function of the environments they inhabit. We associate the once-bountiful Peruvian anchoveta with the favourable food conditions along that country’s coast, with its upwelling nutrients, except when every few years the fish do not appear. From this we came to understand El Niño and La Niña. Anchovies were the most exploited fish in the world (to become fish meal and fertiliser) when these Pacific Ocean swings in climate favoured their near-shore habitat. We are referring to the Walker Circulation which results in alternating droughts or floods in Australia on the other side of the Pacific to Peru. We associate massive shoals of cod with the cold climate of the north Atlantic. The only fish to have a war named after it is the cod. The British ‘Goliath’ fought (if not too strong a word for a ‘Dad’s Army’ in sea scuffles) the Icelandic ‘David’ in the Cod Wars of the 1970s. Australian marine environments are nothing like those of the northern hemisphere. Australia’s marine environments range from equatorial to Antarctic (Macquarie Island), and as a consequence the range of seafood species is extensive. 117

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Northern Prawn Fishery Christmas Island

Cocos (Keeling) Islands

Torres Strait Fisheries

North West Slope Trawl Fishery

Coral Sea Fishery

East Coast Deepwater Trawl Sector Western Tuna & Billfish Fishery Norfolk Island Fishery

Western Deepwater Trawl Fishery

Eastern Tuna & Billfish Fishery

Western Skipjack Tuna Fishery

Eastern Skipjack Tuna Fishery

Southern Bluefin Tuna Fishery Commonwealth GAB Trawl Sector

Commonwealth Trawl Sector Bass Strait Central Zone Scallop Fishery

Gillnet, Hook & Trap Sectors Southern Squid Jig Fishery

Heard Island & McDonald Islands Fishery

Small Pelagic Fishery

South Tasman Rise Fishery

Extent of the Australian Fishing Zone

Macquarie Island Fishery

JN: 62,354

Fig. 8.1.  Australian Fishing Zone and major fisheries.

This chapter focuses on the level of fisheries production in Australia and its economic worth; Chapter 18 explores the export of Australian-caught and farmed seafood. As a general rule, the states and the Northern Territory manage the fisheries that occur directly adjacent to their coastlines while the Commonwealth manages offshore commercial fisheries that extend across state borders. This chapter presents a quick tour around Australia of what seafood each state and the Northern Territory produces. It is not meant to be an exhaustive list of seafood produced in Australia. Figure 8.1 depicts the Australian Fishing Zone and the nation’s major fisheries. Most are harvested to their biological sustainable limit. A particular feature of Australia’s fisheries is their wide north–south spread. Draw an east–west line at Rockhampton in Queensland and everything to the north is tropical. From there head south well past the Queensland border and the waters are subtropical. Further south the waters gradually change to temperate, and eventually they become cold around far-flung Macquarie Island. This geographical spread is important because of the significant difference between the relative productivity of the different climatic zones. In the tropical areas there is habitat, such as coral reefs, for a large variety of seafood species, but few of any individual species. In cold and temperate waters there are few species but many individuals. As much of Australian waters are not temperate or cold, they do not yield the massive fish hauls of one species as experienced in the colder northern parts of the globe.

Western Australia Let’s start our seafood tour in Western Australia and think about what could be included on a WA seafood platter. At $492 million in 2012–13, Western Australia ranks second

8 – Australian fisheries resources

overall in terms of the value of seafood produced, although this figure also includes pearl production. Western Australia is home of the WA rock lobster (Panulirus cygnus) – a species endemic to that state that accounts for most of the value produced. The rock lobster fishery operates between Shark Bay and Cape Leeuwin. While the WA rock lobster is synonymous with WA seafood, the state produces many more seafood products. Western Australia has prawn trawl fisheries with the main production areas being Shark Bay and Exmouth Gulf and the major species caught being western king prawns (Melicertus latisulcatus) and brown tiger prawns (Penaeus esculentus). The Commonwealth-managed Northern Prawn Fishery also extends into the northern part of Western Australia, and several vessels in that fishery are based at Fremantle. The Australian sardine fishery is on the WA south coast between Lancelin and just north of Bunbury, and is a large fishery by volume of production. A seafood platter from Western Australia could also offer octopus (Octopus cf. tetricus), most probably caught offshore from Fremantle and processed there, blue swimmer crabs from Shark Bay (Portunus armatus), saucer scallops (Amusium ballioti) from either Shark Bay, the Abroholos Islands, or the south-west coast, and the iconic WA dhufish (Glaucosoma hebraicum) which are caught by handline and most common between Kalbarri and Augusta. Western Australia does not have a significant aquaculture sector focused on food production, but it is does have a very substantial industry focused on pearl production.

South Australia The next stop on our seafood tour is South Australia. South Australia ranks third overall in Australia in terms of the value of seafood produced ($464 million in 2012–13) and it contains both significant wild fisheries and marine aquaculture sectors. South Australia does not have the WA rock lobster but it does have the southern rock lobster (Jasus edwardsii), which can be caught throughout SA waters. Both greenlip (Haliotis laevigata) and blacklip abalone (Haliotis rubra) can be harvested throughout state waters, although most production comes from the western zone extending from the Eyre Peninsula to the WA border. The Eyre Peninsula can lay claim to being the seafood hub of South Australia, as the region produces ~91% ($222 million) of the aquacultured seafood produced in South Australia (Econosearch 2014). The Eyre Peninsula, with the major township of Port Lincoln, is the key location for the aquaculture of Pacific oysters (Crassostrea gigas), yellowtail kingfish (Seriola lalandi), abalone, and for the ranching of southern bluefin tuna (Thunnus maccoyii). Spencer Gulf is the location for western king prawns, and although the Australian sardine fishery occurs throughout South Australia, a significant proportion is concentrated in the Eyre Peninsula region.

Victoria Victoria ranks sixth in terms of seafood production ($75 million in 2012–13); however our seafood platter from Victoria will still be scrumptious. Southern rock lobster and abalone would again be on the menu. These would be accompanied by ‘flake’ – mainly gummy shark (Mustelus antarcticus) captured off Victorian waters in a Commonwealthmanaged fishery, scallops (Pecten fumatus) and blue mussels (Mytilus galioprovincialis). Scallops are mostly caught in the eastern waters of the state, with most vessels launching from the ports of Lakes Entrance and Welshpool. Blue mussels are harvested in Port Phillip Bay and Westernport. For those keen on finfish, there would be a range of species harvested in the local bays and inlets, such as snapper, bream, whiting and garfish.

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While any of the small towns along the Victorian coast is likely to have a smattering of commercial fishers, Lakes Entrance stands out as a beautiful small fishing port with its own seafood cooperative.

Tasmania Let’s head south now to Tasmania, which is the top-ranking state in terms of the value of seafood produced ($696 million in 2012–13). Atlantic salmon is king in terms of Tasmanian seafood production, but our temperate water favourites – abalone (greenlip and blacklip) and southern rock lobster would again be on our platter, and these are caught around most of Tasmania. Key production locations for Atlantic salmon are the Huon estuary and Macquarie Harbour. Pacific oysters are grown around the north, east and south-east coasts of Tasmania, from the far north-west coast through to the southern part of the D’Entrecasteaux Channel, south of Hobart, with Little Swanport estuary a key production area. Blue eye trevalla (Hyperoglyphe antarctica) and pink ling (Genypterus blacodes) are widely distributed deep-water species, with Tasmanian waters being among the main areas in Australia where these two premium seafood species are caught.

New South Wales We have made it to the east coast now, and New South Wales ranks fifth in terms of the value of seafood produced ($124 million in 2012–13). No seafood platter would be complete in New South Wales without the Sydney rock oyster (Saccostrea glomerata), which is produced in a large number of estuaries throughout the state. Various prawn species are also trawled in New South Wales, with the eastern king prawn (Melicertus plebejus) being the most important; the main production areas are north of Sydney. Although the volume of rock lobster produced in New South Wales is smaller than most other states, New South Wales can lay claim to arguably the tastiest species – the eastern rock lobster (Sagmaraisus verreauxi). Many deep-water finfish species from Commonwealth-managed fisheries are captured off the NSW coast, with john dory (Zeus faber) being perhaps the most iconic of the NSW seafood trade.

Queensland Queensland has a huge diversity of seafood products and ranks fourth in terms of the value of seafood produced ($329 million in 2012–13). Queensland produces a large variety of prawn species from fisheries managed by the state on the east coast, the Commonwealth-managed Northern Prawn Fishery which operates in the Gulf of Carpentaria, and from prawn farms at various locations. In the process of capturing prawns, Moreton Bay bugs (Thenus spp.) are also caught in several locations and these are a prized by-product. Trawling can also target and capture saucer scallops, with waters between Hervey Bay and Gladstone being the key production areas and Hervey Bay the main location for processing. Queensland also has significant crab fisheries focused on mud crabs (Scylla serrata) that are captured in estuaries throughout the state, spanner crabs (Ranina ranina) that are captured in deep waters off central and southern Queensland, and blue swimmer crabs (Portunus armatus) captured in Moreton and Hervey bays. Of all the finfish varieties produced in Queensland, perhaps the best is the common coral trout (Plectropomus leopardus), which is captured in coral reef waters.

8 – Australian fisheries resources

Table 8.1.  Volume and value of key fisheries products (aquaculture and wild caught) from each state and the Commonwealth in 2012–13 Jurisdiction

Product

Western Australia

WA rock lobster

South Australia

Volume (tonnes)

Value ($ million)

6066

236

Prawns

2320

26

Australian sardine

2222

2

Southern rock lobster

1552

86

Abalone

1099

38

Southern bluefin tuna

7486

153

Yellowtail kingfisha

889

11

35 062

21

Prawns

1881

30

Oysters

5710

35

Abalone

1196

37

Australian sardine

Victoria

Southern rock lobster Tasmania

New South Wales

307

17

41 762

489

Abalone

2566

101

Oysters

3449

23

Southern rock lobster

1312

65

Oysters

3417

35

Prawns

1612

18

Atlantic salmonb

Eastern rock lobster Queenslandd

142

8

10 580

138

2835

30

661

13

Coral trout

760

25

Barramundie

728

6

Mud crabs

318

6

Prawns Crabs Moreton Bay bugs

Northern Territory

Source: Stephan and Hobsbawn (2014) unless otherwise identified. Notes: a From Econosearch (2014). The volume and value also contain finfish other than yellowtail kingfish, but yellowtail kingfish is the dominant component. b This also includes other salmonids (e.g. rainbow trout) but Atlantic salmon dominate. c While the catch is predominantly eastern rock lobster, it also includes small amounts of southern rock lobster and tropical rock lobsters (Panulirus longipes and P. ornatus). d Data for Moreton Bay bugs and coral trout from: https://www.daf.qld.gov.au/fisheries/monitoring-our-fisheries/ data-reports/sustainability-reporting/queensland-fisheries-summary/queensland-fisheries-summary e Data from: http://www.nt.gov.au/d/Content/File/p/Fish_Rep/03_FR113_Barramundi.pdf

Northern Territory While Northern Territory ranks last in terms of seafood produced ($61 million in 2012– 13), it still represents an important economic activity. Many tourists when they visit the ‘Top End’ wish to consume barramundi (Lates calcarifer) which are captured in its rivers and estuaries. Mud crabs are caught in most NT waters and sold in southern markets, but most production comes from the Gulf of Carpentaria. Prawns from the Northern Prawn Fishery are also captured off the Northern Territory coast. Looking to the future, there is significant potential to develop aquaculture in the Northern Territory. Australian aquaculture technology is world class and as it is not a

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labour-intensive industry (although processing the harvest can be) we should be able to compete on both quality and cost grounds with foreign aquaculturists. As with most of the forward-looking developments we are mentioning throughout the book, a thorough cost– benefit analysis is required.

In summary The quantity and value of catch (landed at the wharf) are presented in Table 8.1. Figure 8.1 shows where the major species are harvested. What is not shown is the route that important pelagic (open-sea) species, such as blue fin tuna, take as they enter Australian waters from the north.

SECTION 3 HUMAN AND POLITICAL DIMENSIONS

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9

Tar and cement, big holes, small wells and pipelines T. Hundloe and H. Ditton

Introduction In this chapter we tackle the matter of the protection, or lack of protection, of prime agricultural land. One threat is obvious: it is the spatial expansion of our cities. Recall that Australia is going to see a significantly increased population if Australian governments have their way, from 23 million to 35 million inhabitants by 2050, then on to some undisclosed number once 35 million is reached. Australia is one of the most urbanised countries in the world, and ~90% of its people live in urban areas. The predicted increase in people will be confined to the cities: they won’t be farm labourers, because we are extremely efficient agricultural producers, and with the amalgamation of small farms into larger ones (dairy is the best example) we don’t need more farmers. Cities grow spatially, appropriating land that has other values, rendering the opportunity cost high. Land prices don’t reflect this: farm land is sold far too cheaply if its ongoing capacity to grow food is discounted. The land on which residential houses, commercial buildings and industrial estates sit should have as little value as possible in other uses. We shall explain why.

The consequences of city building Australian cities have developed, as is common worldwide, in locations where access to sea transport is viable, that is at deep-water entrances; otherwise they developed at or near the mouths of major rivers. Before the advent of the modern large container ships, shallowwater berths were adequate and were likely to be upstream of the river’s mouth. The wharfs at New Farm and Newstead on the Brisbane River (now unsuitable for cargo loading as ships have increased dramatically in size and cannot reach that far upstream) are reminders of that past era. When cargo ships were smaller, all the wool grown in Queensland was exported from the upstream wharfs. The lowland west of there, fed by several creeks draining into the Brisbane River, was dairy country, the hills pineapple country. 125

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There are other examples of upstream port locations. While not in the category of a major industrial port, the 19th century inland town of Echuca was once Australia’s busiest port, with wool bales carried by paddle-steamers from the vast properties on the Darling River pouring into it to be off-loaded and sent by rail to Melbourne on their way to the UK woollen mills. This we have noted previously. The other major reason for, and benefit of, locating an urban settlement near the mouth of a river is that cities start small, and the city-building pioneers had arable land at their doorstep. River plains are comprised of alluvial soils deposited over eons and continually replenished by flood waters. While urban settlements remain nothing more than villages or small towns and the residents have their own or community vegetable and fruit gardens, little good quality farming soil is covered by city buildings and roads. Farmed produce is at ‘the backdoor’, cheap, and minimal transport of food is involved. This does not last. The 20th century saw all the major Australian cities grow in size and grow in population. Where John Macarthur grazed the first commercial merino flock in the colony of New South Wales on Elizabeth Farm at Rose Hill (Parramatta) we now have Sydney suburbs. Much of top quality farming land has been lost around all Australian cities as their populations have grown and residential, commercial and industrial buildings have been built, ever radiating out from the city centre. Land not covered by buildings has become suburban roads and footpaths and an otherwise impervious surface from which water and urban rubbish rushes to the sea when the rains come. The loss of agricultural land is the most important thing, but the flushing of urban detritus into major rivers and the sea is another negative outcome of city building. The latter can be managed. There is no saving of farming land from urbanisation. It is not just the built-in suburban area, the peri-urban environment has been pushed further into what was commercial farm land. In Brisbane, for example, what were once market gardens producing vegetables on the periphery of the city have all but disappeared, moved greater distances from the city centre. Small-scale horticultural crop land (such as for pawpaws, bananas, avocados, mangoes and many others) have been cleared of fruit trees and built on; the lowland to the west, fed by several creeks draining into the Brisbane River, was dairy country, the hills pineapple country. What happened in Brisbane occurred in all other capitals; only the agricultural produce that gave way to tar and cement differed. For example, as Melbourne expanded apple orchards disappeared, as did the typical nearcity market gardens and dairy and small beef farms. In the sugar-cane regions (a major one being the tourist town of Cairns), good quality cane land is now covered by residential buildings and light industry.

The myopic land-market The traders, and the many speculators, in the land market do agriculture and in particular its sustainability no favours. A fundamental flaw of the modern economic system is that market values (for land and anything else that is traded) are determined by people with a very short time horizon. This matters little, if at all, if the commodity being sold is a haircut, a restaurant meal or, for that matter, much else that can be produced on an on-going basis. Where it matters is when the commodity produced is an essential good, and the basic input, land, has to be maintained in good condition in perpetuity if production is to meet the long-term needs of people. Land is therefore similar to other capital assets that have to be maintained year-in, year-out if they are to remain productive and profitable. Without question there are farmers who treat their land in this way. On the other hand,

9 – Tar and cement, big holes, small wells and pipelines

land for most city dwellers and city-based businesses has its value determined by location (for example, proximity to the CBD). That its agricultural production value will inevitably be lost once the top soil is bulldozed away and concrete slabs laid does not enter into the real estate agent’s equation. Farmers who resist the temptation to sell to urban developers discover that their rates (land taxes) work against preserving farm land. Not all economic decisions are made without regard to the future. Farmers in particular tend to have a goal of managing their farms so that generation after generation can follow them in their trade. Not only farmers, but we find as a general rule that most people will think as far ahead as their grandchildren’s time. Maybe not so many beyond that. The cost of agricultural produce in 50 years’ time is not a consideration for most. If sustainability means anything, it means putting value on the life and economic welfare of those who will live in a distant future. Hence, natural resources on which we depend not only for food but for life-support in general must be preserved indefinitely. In this context, irreversible destruction of good quality soil for whatever purpose is economic vandalism. Both the market and politics fail when this occurs. Politics fails if our politicians don’t override the market by putting in place town planning laws to the desired effect. The land market fails due to the weight of money to be made in the residential housing market and in the development of shopping centres and industrial estates. Money is to be made by the stroke of pen (the press of a computer key) that changes the zoning of land from ‘rural’ to ‘residential’ and/or ‘industrial’. What defeats the normal efficiency of market transactions is (beyond the arbitrary stroke of the pen) the short-sighted calculations of powerful market players. Money can be made by rezoning, yet no productive work is involved. Economists have a term for this: ‘rent-seeking’. The loss of prime agricultural land can only be halted and this land protected for the long term by tough planning law. The land market as it presently operates will see ‘developers’ gain control of valuable farmland. We have to rely on a higher authority to look after the future. This is the task we allocate to professional ‘town and country planners’. They tend not to use this full description today and that is part of the problem. If they see themselves as solely ‘town’ or ‘urban’ planners, who speaks for the farm land, for the protected land (such as national parks) and for the Indigenous lands? There is a more basic issue: are decisions on the status of land made by planners or by politicians? If the latter have a shortterm time horizon because they are only in office for three or four years before having to seek re-election, and if there are more urban votes than rural votes, the problem if the planners are overruled by the politicians is obvious. The loss of good quality agricultural land will be to the long-term detriment of farm output and indirectly to the national economy. City dwellers will come to pay more for farm produce as it will be sourced further afield, often where land is of poorer quality and rainfall deficient. Maybe irrigation will be necessary to grow the same quantity of foodstuff that was previously grown on coastal floodplains that are now under tar and cement. More fertilisers are likely to be required on the poorer quality land that is being farmed. Farm produce will be transported over longer distances. Costs of farming must increase. City consumers will be poorer for that. They won’t be winners in the long term, notwithstanding the value they place on their city residence. No one yet has been able to devise economic incentives both strong and rational enough to stop the rural migration to the cities. In a democracy there is no place to dictate where one should live. Living in cities has much broader benefits than narrow economic considerations. Yet village life as depicted on television seems idyllic. The case for sustaining rural villages has economic, social and environmental dimensions. The economic issue

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narrows down to the costs versus benefits of retaining small farms where the diseconomies of small scale mean higher agricultural product prices. The alternative is to subsidise these farmers. Where serious efforts to this effect are being made, as in France, Scandinavia and Japan, this is condemned as ‘protectionism’. So it is, but broaden and deepen the cost–benefit analysis to include community benefits and the result could end up favouring the retention of small farms and rural villages.

When the miners come The other threat to prime agricultural land arises from its allocation to miners. In Australia, most of the large open-cut mines are not located in prime agricultural land but in extensive grazing country where the mines, however large, are very small in the context of massive sheep and cattle properties. There are exceptions as we will illustrate. One coal mine in the Blackwater area of central Queensland stretches for 60–70 km. In this, and several other cases, the mining companies have overcome potential disputes with farmers by buying the farms. The restoration of the mined land (now required by law) permits the reintroduction of grazing once the three, four or more decades of mining have passed. This means the economic loss to the farmers is temporary. Given the minimal extent and nature of the land taken out of production (grazing land in most cases), the impact on farm output and prices will not be noticed. If mining were to alienate land otherwise used for cultivation where the returns per hectare can be much higher, we would expect a noticeable economic impact. There are situations where farmers and miners do come into conflict. Coal mining in the Hunter region of New South Wales has been a long-running sore. Controversies are becoming more common. A recent controversy arose with the extension of the Ackland coal mine close to Ipswich, a virtual dormitory suburb of Brisbane. Mining in this location became an issue in the 2014 Queensland state government election, in which the government changed hands with a massive swing against the incumbent. This controversy, aired constantly in the media, played a small part in the overall mix of matters that determined the election result. We are entering a different era to the past where mining and farming tended to coexist. Farmers are becoming far more vocal when they believe their land is at stake. Coal mining, a major part of the mining sector, has come to be opposed by some on the grounds that the burning of the coal, whether in Australia or in the Asian countries importing it, is a significant producer of greenhouse gases. This is an extremely important topic in its own right, going to the heart of the global search for a solution to the increasing build-up of carbon dioxide and the other greenhouse gases in the atmosphere. It would divert attention from our purpose to meander into this issue, much as it deserves very serious attention. From a farmers’ perspective the focus has been, and is, the loss of grazing and cropping land to mining, as well as any negative externalities that could result during the mining process. While mining is underway, obviously land is taken out of cultivation or pastoral use. When the land is ultimately restored to something akin to its original state it can be ploughed or grazed again. This can prove difficult, if not impossible, when the quantities extracted are large, as the land will never be the same. That recognised, restoration is a pragmatic and economically sustainable land-use sequence if done well. This requires reshaping the land to near its original form, restoring the topsoil with its nutrients intact and replanting the vegetation. Restoration of mined land can and should start once a suitable-sized plot is ready for rehabilitation.

9 – Tar and cement, big holes, small wells and pipelines

Restoration was not practised in the past. There are ‘moonscapes’ such as the hills surrounding Queenstown, in Tasmania. The Australian Rules football oval in the middle of the town grows not a single blade of grass. Fortunately, the locals love their football and are not to be deterred. Many a scarred knee is carried with pride. There are examples of big, ugly pits and slag heaps, one well-known case being the heavily polluted, water-filled pit at the derelict Mt Morgan mine just west of Rockhampton, Queensland. In recent times miners are required by law to restore land, and some spend very large sums of money to do so. We should never see another Queenstown or Mt Morgan. However, if you are interested in the history of mining and what happens when the mine workers and owners depart without a thought of restoration, go and visit both places. No photo does justice to either. In some regions compromise has been necessary if both mining and farming are to coexist. The Hunter region of New South Wales has been mentioned. Some of the land allocated to the miners in the early days was of relatively high agricultural value. The Hunter wine producers pride themselves on their product. Coal dust from mining and the transport of coal has been an issue for them over the years. The gradual and continuing opening up of the Hunter region to mining illustrates a major shortcoming of conventional environmental impact assessment. The practice has been – and it has hardly changed notwithstanding the recognition by experts that it is flawed – to treat each new application for a mine as if it is to be the only (or first) mine in the area. One mine might not cause much in the way of coal dust and any other negative externalities. The second mine would add marginally to the negative impacts, but is likely to be approved. And so on. There comes a time when the cumulative impacts of a series of mines bring the whole mining industry in a particular region into question. We are ever so slowly learning from such examples, and considerable theoretical discussion of cumulative impacts is taking place. Yet, the day-to-day assessment of projects, not only of mining but of all types of projects, tends to pay no more than passing regard to flow-on and cumulative impacts. The lack of attention to cumulative impacts is evidenced in urban and tourist locations. The dramatically changed nature of the Gold Coast, from beautiful fore-dunes and natural beaches to urban high-rise and manicured beaches, is a prime example of the flaws in environmental impact procedure. The solution to the problems caused by cumulative impacts requires much forward thinking and serious land-use planning based on informed judgments. If there are incompatible uses of land, priorities based on sustainability principles need to be applied. Highvalue agriculture is unlikely to lose if these principles are enforced, for the simple reason that they require decision-makers to take into account alternatives and substitutes; for example, there are substitute fuel sources if the mining is for coal. This is not to argue against coal mining; rather it is to require a decision-maker to weigh the economic loss to a farmer and the consumers of his/her products against the economic benefit of yet another coal mine in the locality, if the power to be generated could come from another economic source (which could be a commercial-scale solar farm). In some countries the alternative could be nuclear power. For the record, Australia sells coal, uranium and wine overseas. What is involved in difficult land-use decisions is thinking and evaluation of a much more comprehensive nature than that exercised at present.

The fracking matter As we write, the major controversy over rural land use pertains to the exploitation of what in Australia is called ‘coal seam gas’ (CSG), otherwise methane embedded in seams of coal.

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Fig. 9.1.  Lock the gate. Source: The Land, 23 July 2015.

In the United States the method of extraction has been dubbed ‘fracking’.11 The correct terminology is ‘hydraulic fracturing’. The gas is extracted by sinking wells and then water is pumped down to loosen the material in which the gas is trapped. Toxic chemicals are added in the process, and this has led to concern that these could contaminate underground water that would be used by farmers. The water, even without the use of these chemicals, could return to the surface as highly saline. It is likely to require treatment if is to be used on farms. The US process is not, at present at least, comparable to that permitted in Australia. While not a great deal of land is required per CSG well-head, there can be many well heads in fairly close proximity and a substantial amount of agricultural land may be taken out of production when the wells are in operation. This would be for a considerable number of years. In addition, there is disturbance to farming when the gas pipelines are being laid across or under the farmer’s land. In Australia the gas is piped very long distances to ports for export. In the Queensland case, the port is Gladstone and gas fields hundreds of kilometres away in the inland farming areas. Land lost from cultivation or grazing is one matter; the other, as mentioned above, is impacts on water resources. A particular concern with CSG production is the disposal of the large quantities of water that are used in the process, plus the fear based on US practice that the water could be contaminated, with the potential to poison farmers’ crops and animals. In Australia, the water that returns to the surface after the gas-drilling process is generally saline and needs to be treated (desalinated) by reverse osmosis before it can be used on farms. There are examples of this happening in the Roma district of south-west Queensland. The CSG industry arrived on the scene in Australia suddenly. There was no sustained public discussion about it before it came. Approvals were given to the mining companies when the science was not fully understood and explained. Groups of farmers and environ-

9 – Tar and cement, big holes, small wells and pipelines

mental advocates ‘locked the gate’ on the miners12 (see Fig. 9.1). This is not to claim that all farmers with CSG wells on their properties are unhappy. Some will be satisfied with the compensation given to them by miners. A range of important issues still need to be solved by scientific inquiry and where necessary by new legislation to manage the CSG industry. It would appear that science has some catching up to do or, if this is not the issue, scientists need to answer the questions of the sceptics and those opposed to CSG production. The issues are far too important to be brushed aside. As this book was going to print a Queensland farmer who had been battling for what he considered where his rights against the CSG industry committed suicide in the belief that his farm and family’s future was lost. That this situation should have been allowed to occur must send a strong message to those who have, or should have, more power than the miners. Part of the problem is that farmers can be poorly versed on their rights. Clouding the CSG debate are disputes as to real or perceived legal rights of farmers and miners. The following is the gist of the matter. As a general principle of law in Australia, underground resources such as minerals and gas are the property of all citizens, managed by governments on their behalf. In formal terms, we would say the underground resources are the property of the Crown, and managed by the Crown (the government). What this means is that governments are free to allocate underground resources to other parties. This is not necessarily understood or appreciated by farmers who farm the land above. Some think that they should own the gems, minerals or gases underground. In the states of Queensland and New South Wales where the CSG industry is well underway on a major scale, governments past and present are attempting to manage the land-use conflicts by quarantining certain lands solely for farming. However, considerable CSG production will occur on farming land that is not quarantined. Conflicts are likely to continue. To add to the complexity of the situation, each Australian state or territory has sovereign rights to its underground resources, and each has its own particular approach. Consistency, if based on sound science and a common legal principle, would be highly desirable.

In summary While we expect our farmers to be stewards of land, the public as a whole is not necessarily showing that it cares as much as it should. If we allow good quality farming land to be gobbled up by the expansion of cities and if we are lax in controlling mining on agricultural land, we send the wrong signals to farmers. In fact, we are saying ‘do as I say, not as I do’.

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10

When is a tomato not a tomato? H. Ditton and T. Hundloe

Introduction If anything is going to be controversial with farming it is the application of modern biotechnological methods, specifically gene manipulation, to improve food yields, deal with agricultural pests, or change the appearance, shape or tastes of foods. What has come to be called ‘genetic engineering’, the manipulation of genetic material in cells (DNA) to produce ‘genetically modified organisms’ (GMOs) is the central issue. The real bogy is ‘transgenic’ modification if it does, or is perceived to, involve the mixing of animal and plant genes. Transgenics per se is not so much the issue. However, for many people it is considered unnatural when genes from unrelated species are combined to form a ‘thing’ that would not otherwise exist, at least in time spans that humans are familiar with. Evolution could bring about the same result over a very long time frame and that, we suspect, most of us would be comfortable with. Health-conscious consumers are likely to reject GMOs. The case of European Union consumers is an example, where political pressure has resulted in strict labelling laws and restrictions on farming GMO products. Much of the developed world is as one when it comes to rejection of genetic engineering of food to be eaten by humans, but the people of the United States are far more relaxed than most and GM food is available. We remain ignorant of the situation in developing countries. There are likely to be vast numbers of humans oblivious to GMOs. For the poor, food is food. There is not enough of it to go around at affordable prices regardless of how it was grown.

Understanding consumers What might we expect from consumers in the richer developing countries? Will the easyto-worry Chinese middle-class consumers say No to GM produce? What is their level of knowledge? We would be foolhardy to discount their attitudes. In fact, given the prominence of Chinese consumers in our overseas sales, we must do our very best to understand their preferences and how they are likely to develop over time. The middle-class Chinese are increasingly well educated. They take notice of what the northern Europeans do as much as what the Americans do. If Australian exporters misread our foreign consumers’ preferences, a competitor could gazump Australia by coming to understand the consumer 133

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market better than we do. Of course, if we are ahead of the trend (not too far ahead), we are well placed to enjoy first-mover status and above-normal profits until the others catch up. Simply put, if our major customers are likely to reject GM food we need to be aware of this. If we at home are anti-GM but our overseas customers don’t care about how their food is grown, we will need to recognise this. Different attitudes may not matter, but they might. While many people have little appreciation that selective breeding has been around from the genesis of farming (sweet corn cobs have always been large!), they have few concerns about selective breeding and can readily see its benefits. One would need dozens of the original corn cobs to equal the nutrition from one modern cob. Selective breeding is not GM. Nor is causing mutants, such as seedless grapes, by mutagenesis, because the genes (DNA) involved all come from grapes. So many matters to explain.

When something goes wrong Concerns are magnified when something goes terribly wrong. And it does not have to be a GMO scare for it to become associated with GM products. The average consumer does not have, or make, time to scour the latest scientific literature. The following example illustrates what can happen when something goes horribly wrong in the farmed food business. Australians in particular are aware of, and frightened by, Hendra virus (transmitted to humans from horses); avian influenza, transmitted by domestic fowls but not occurring in Australia; anthrax transmitted by sheep and a serious concern in Australia; and Q-fever, otherwise ‘Query fever’ first recognised in Australia in the 1930s when workers in a Brisbane meat-processing plant became feverish. All these life-threatening diseases are zoonotic; that is, they are animal diseases that can pass to humans, so it is understandable that humans are wary of illnesses associated with animals. Something could go wrong. What is commonly called ‘mad cow disease’, a neurodegenerative disease more formally known as bovine spongiform encephalopathy, resulted in around 150 human deaths in the United Kingdom following the outbreak of this disease in the late 1980s. To contain the disease in cattle, 4.4 million cattle were slaughtered in the United Kingdom, and there was an export ban from 1996 to 2006. How did mad cow disease occur? Feeding cattle with meat by-products and bone meal from sheep and cattle that carried the infective agent is the leading theory. As the first cattle fell ill the British Government strenuously denied there was a risk to human health, but the fact that people later died has made the public suspicious of other similar claims concerning food safety. While mad cow disease was not a case of GM, in the public’s mind this is neither here nor there. It is understandable that humans can equate zoonotic events with the transfer of animal genes to plants due to the ‘weird’ experiments that get published. Who has not read about fish that glow in the dark (from jellyfish genes) and feared being served fish and chips that are as dangerous as a nuclear mishap! While transgenics and mutagenesis (exposing seeds to chemicals or radiation to obtain desirable mutants) are not themselves problems of the GMO world, other things are, as we discuss below.

Not all mad cow disease is zoonotic The human form of mad cow disease is called Creutzfeldt-Jakob disease (CJD). There are different forms and causes of this disease, some not associated with ‘mad cows’. The form that is transmitted from cows is known as ‘variant’ CJD. The other forms include ‘spo-

10 – When is a tomato not a tomato?

radic’ and ‘familial’ CJD. Of these there are in the order of 35 cases per year in Australia and 300 in the United States. Given that the media are likely to report cases of non-variant CJD as ‘mad cow’ disease and most people know little about it, it is not unexpected that any case of CJD is associated with messing with the food of cows.

Where there are no issues One can find examples of where the public has no issue with GMO products. There is a positive story pertaining to the genetic modification of cotton so that when pesticides and herbicides are applied to the cotton it survives but the pests and weeds die. The vast quantity of cotton clothing and bed ‘linen’ purchased worldwide is proof of a lack of concern. Notwithstanding this, there is a niche market for organic cotton for those who reject the use of artificial chemicals and fertilisers.

What are the issues? Of all anti-GMO arguments, none surpasses a fear that human health is at risk. Claim and counter-claim abound. In some cases we lack definitive evidence to conclude one way or the other. Even where there is evidentiary proof one way or the other, some people put their beliefs before science. This can mean that farmers have to be cognisant of what consumers believe and how that translates into their shopping behaviour. To give some idea of the concerns we note that glyphosate, the main ingredient of Monsanto’s widely used herbicide Roundup, is asserted to be involved in the following health matters: autism, infertility, Parkinson’s disease, various cancers and allergies. Glyphosate is a broad-spectrum herbicide that kills green-leafed plants. It attacks an enzyme essential for plant growth. Humans and other animals do not have this enzyme. Then there is the concern that antibiotic resistance marker genes that are combined with the gene that will give the plant a new trait could compromise the effectiveness of antibiotics. Until the scientific evidence is beyond challenge, farmers need to respond to the decisions consumers make in the market-place. What influence GM concerns are likely to have in the future on food supply is a matter we must attempt to understand. Just as consumers can reject bananas that are deemed to be too bent, they could make similar subjective decisions on genetic engineering of food. On this issue, more than most, we need a rational scientific debate. However, we should not expect science itself to resolve the debate. Consumers have the right to choose the foods they eat. Increasingly they are demanding to know how they are produced. Another book could be written on the pros and cons of food labelling laws and how they should be improved. One improvement is to ensure that food can be traced to its source or sources, if not directly through labelling then via certification programs. That aside, here we will unscramble the various concerns with GMOs.

The GM tomato and other stories Go searching fruit and vegetable shops and supermarkets today and you will not find a GM tomato. Yet in 1994 the first commercially grown GM food appeared in the shops. It was a tomato that had longer shelf life than its ‘natural’ relatives. For some time this fruit was popular in the United States and in some other countries. In the years that followed the release of the tomato, libraries of books were written on GMOs, many extolling the

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dangers. The GM strawberry that was going to resist frostbite because it had some coldwater fish genes did not have a chance. The public was tending to come down on the antiGM side as the tomato story spread. The natural world was threatened, so it seemed, by a Frankenstein invention, termed ‘frankenfood’. While the GM tomato was to quickly relegated to the reject bin, ‘super mice’ continued to be ‘created’ for the benefit of medical research. This caused no controversy, partly because like all medical research it goes on in laboratories not open to the public. One cannot go about this type of scientific work with citizens gazing over your shoulder. Now, no one eats laboratory mice and hence there was no or only small amount of concern, even though ‘experimenting’ with animals appals some people.

Other sides of the story The externality You are a certified organic farmer. To get to this position has taken three years of labour converting your property and ensuring that all the chemicals that you had used previously have dissipated. Then your next-door farmer puts in a crop of canola using GM seeds. After soy, cotton and maize, canola ranks next in the application of gene technology. Some Australian states permit growing of GM canola. All it needs is wind to blow parts of the GM plants on to the neighbour’s organic crop and this will be viewed as contamination. Here we have a classic case of an externality. Court cases ensue, but so far without clear-cut decisions. Big business dominates One does not read about GMOs without coming across the giant firm Monsanto. This is where the anti-GM story enters into the realm of political economy. Monsanto is the world’s largest seed company, a position it has achieved by acquiring several competitors. What differentiates this firm from your traditional seed supplier is that it uses gene technology to create new seeds, which it patents as ‘inventions’. On this matter alone Monsanto finds few friends among the scientific and farming communities. Put at its simplest and starkest, the argument is that no one should be able to own ‘lifeproducing matter’. This can be expressed as privatising nature. Scientists are trained to work for the ‘public good’ and the idea of a multinational firm (or anyone else) being able to own research findings resulting from scientific effort is rejected. Farmers do not have the same philosophical attitude; rather they tend to view nature as the ‘owner’ of seeds, plants and animals they care for and grow. Imagine if every selectively bred seed or plant had been patented by the farmer who undertook the experiment and each farmer demanded payment from and control over other farmers who wanted to plant the improved crop! Farming would have ceased soon after it started 10 000 years ago. The other feature of Monsanto’s business model is that it binds farmers who use its seeds to the firm. How this works is that when a farmer buys Monsanto seeds the farmer is required to sign an agreement that if he/she is to use the seeds from the first crop this amounts to planting Monsanto’s seeds and hence a royalty has to be paid to the company. The argument against this is that it will lead to world domination of agriculture by this company. There are other aspects of Monsanto’s modus operandi that favour the company at the potential expense of the farmer who uses its seeds. One that is bothersome is the requirement that the farmer sign a no-liability agreement, which means that if a neighbour’s crop is adversely affected, Monsanto can’t be sued but the farmer can.

10 – When is a tomato not a tomato?

But is GM not doing good? The Monsanto company claims in its various publicity campaigns that: ‘We are dedicated to helping feed nine billion more sustainably by 2050’. The part of the assertion that relates to sustainability is the argument that GM crops use less water and pesticides while improving yields. These are contested claims and it would be a major digression for us to pursue them. Of course, before the possibility of a movement towards sustainability can be resolved, the question of the safety of GM foods has to be dealt with. Herein controversy reigns. Two of the world’s most eminent scientific bodies, the American Association for the Advancement of Science and Britain’s Royal Society, can find no evidence that GM foods cause harm to humans or other animals. Individual scientists have come to the same conclusion, some changing their mind in recognition of new evidence. An interesting supporter of GMOs is British environmentalist Mark Lynas, who is on record as saying that a person is more likely to be hit by an asteroid than hurt by GM food. Notwithstanding the support for GMOs by eminent organisations and individuals, a search of the literature will reveal many qualified people who take a contrary view. Our task is to ensure that farmers take notice of food fashions regardless of how they arise. Farmers are unlikely to change consumers’ attitudes to GMOs. Consumers will signal by their buying habits the value, or lack of value, they place on GMOs. The adage that ‘the customer is always right’ underpins success in a competitive market-place. Only monopolists and cartels can ignore the consumer and get away with it.

What we can conclude Even if gene technology were able to bring the benefits of increased crop yields while requiring less agricultural inputs, it is not going to solve the food security problem for the increasing number of poor in Sub-Saharan Africa. In earlier chapters we have made it abundantly clear what the problems are in this part of the world. A GM revolution is not the sort of revolution they need if they are to feed themselves. The second point we can make is whether or not GM foods sell or not is, when it is all said and done, a matter of consumer preferences. At present these tend to be running against GM foods. Increasingly, food brands are labelled to inform the purchaser that their products are not GM. The rather rapid increase in demand for organically grown food as documented in considerable detail in the World of Organic Agriculture (FiBL and IFOAM 2015) suggests a trend towards what we will call ‘authentic food’. We have noticed the public’s desire for authentic environments: they want the Great Barrier Reef in its natural condition, not having to be ‘re-planted’ with corals and clams and repopulated with farm-bred crustaceans. Similarly the public wants to view the real Mona Lisa, not some copy. This attitude is coming to apply to food, and not just crops. Animal rights campaigners object to gene technologies being used to change animals, such as breeding cows without horns. Then there are fears by dairy-farmers and milk processors that if milk is produced by GM cows it will no longer be ‘wholesome’ (Talbot 2014). This is the evolving philosophy we witness. What we need to recognise is that, as Paul Thompson states in his book From Field to Fork: Food Ethics for Everyone (2015, p. 211), regardless of our personal views, however, much they may be scientifically solid, ‘we should respect an individual’s right to make dietary choices that conform to his or her personal vision of what is natural or, more generally, appropriate to eat.’

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A major unknown at present is what attitude the rapidly increasing middle classes in the developing countries will take to GM foods. China could set the scene on this issue. Talbot (2014) makes a point that can’t be ignored: ‘China’s stance on GMO foods (is) critical for the entire global market’. If China ‘green-lights’ GMOs, countries that export to China will offer Chinese consumers GM foods if they are the least-cost option. This point made, we must not overlook the fact that the middle-class Chinese consumer is an anxious, health-conscious person. He or she could become as scared of GMO foods as are many Western consumers. As with the ever-changing consumer preferences, of which there are numerous examples throughout this book, Australian farmers are going to need to keep a focus on probable GM futures. The message is read the authoritative literature and act accordingly.

11

Waste not, want not: the case of the bent banana13 A. White, D. Gallegos and T. Hundloe

Introduction Bananas are the one fruit available 365 days of the year in Australia. They grow from Coffs Harbour in mid-north New South Wales to the Daintree in Queensland. The vast bulk of them are grown in the Tully area of north Queensland. Pictured in Fig. 11.1 is Tully banana farmer Steve Lowe, a member of the Board of the Australian Banana Growers Council. So popular are bananas in Queensland that residents of that state are called ‘banana-benders’. This chapter is not about banana growing. Australian-grown bananas are not going to play a role in feeding the world, as there are several low-cost developing countries wellsuited to play this role. This chapter uses the Australian banana industry to illustrate the waste that occurs when consumers become rich, some would say too rich. As you read on

Fig. 11.1.  Steve Lowe, a banana farmer of Tully and member of the Board of the Australian Banana Growers Council. 139

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you will come across the concept of ‘cosmetic standards’. Such a standard relates to how a fruit or vegetable ‘should’ look if it is to be sold.

The issue of waste The efforts to produce food of the highest quality for sale … are often lost simply because the food is thrown away. This reaches up to 30–40% of the food that is produced (UNEP 2009, p. 29). From a global perspective, bananas are one of the most traded commodities in the world, and they are an important source of nutrition and income for many developing countries. Approximately 98% of bananas are grown in developing countries such as India, the Philippines and Brazil, with 20% of total global production traded on the world market. Of this, the developed nations of Japan, the European Union and North America import more than 70%. Given that supermarkets dominate the retail sector in these developed countries and have similar cosmetic standards in place, it is fair to assume that the levels of edible waste generated on-farm in the banana-producing countries are similar to those found in the north Queensland industry. Depending on how the waste is managed in these countries, it is possible that the unnecessary and unrealistic expectations of supermarkets (and indirectly consumers) in the developed world are translating into economic and nutritional losses to those in the developing world, many of whom are already food insecure. There is no doubt that a growing population will need more food; what is questioned is whether this is in whole or part achievable through increased production. A complementary approach to setting out to grow more food would be to start with addressing the inefficiency of the food system, in particular by reducing the estimated 50% of food that is wasted as it moves from paddock to plate. While reducing household food waste has been the focus of several recent campaigns, the amount of unnecessary food waste that occurs at farm level has received little attention. The type of food loss that occurs at this level varies greatly depending on the type and durability of the crop. And it depends on the wealth of the society. Throughout history the poor have wasted little, if any, food. Waste includes both quantitative and qualitative losses such as loss in edibility, nutritional quality, caloric value and consumer satisfaction with the product. While some of this waste is due to a lack of nutritional quality or food safety concerns, too often it is because the food exhibits physical attributes that are considered to be flaws by principal food retailers. These are the supermarkets. As a consequence, a significant portion of the food produced is discarded before it leaves the farm. The Australian banana industry has been chosen as a case study for several reasons. First, a high percentage (70%) of total banana production is sold to the two major Australian retailers, indicating that the specifications set by the retailers can be expected to have a significant impact on the industry. Second, bananas are one of the few horticultural products that supply 100% of the Australian domestic market, with minimal quantities exported. This makes the task of accounting for industry inputs and outputs simple and accurate. In 2009, Australia’s 800 banana growers produced over 20.7 million cartons of bananas. Each carton holds 13 kg of fruit. Approximately 90% of these are grown in north Queensland, with minor growing areas in south-east Queensland, northern New South Wales and to a lesser extent in the Northern Territory and Western Australia. The north Queensland industry is highly successful, as the tropical climate allows for year-round production.

11 – Waste not, want not: the case of the bent banana

Previous research has indicated that somewhere between 10 and 30% of total banana production is discarded before it leaves the farm, with the majority of this waste linked to a failure to meet cosmetic standards outlined in product specifications set by retailers. Product specifications for bananas are set by the two major Australian grocery retailers and the central wholesale markets. All three sets of specifications for Cavendish bananas have the same requirements established for general appearance, major defects, minor defects and consignment criteria. The consignment and major defect criteria play an important role in maintaining a safe and publicly transparent food supply. They specify the need for production systems to meet strict food safety standards (Food Standards Australia New Zealand, Hazard Analysis and Critical Control Points), comply with quarantine regulations, and meet benchmarks set for refrigeration and labelling. The criteria covering major defects ensure that produce is free from pests and diseases that pose a threat to human or environmental health. For example, bananas are washed in farm packing sheds to remove any rodent urine. The minor defects and general appearance sections set high cosmetic criteria for colour, shape, size and visual appearance and have little impact on food safety or health. These specifications are outlined in Table 11.1. If bananas sent to retailers do not meet these standards, they are rejected and sent back to the grower at the grower’s expense, unless supply is low in which case the specifications are reviewable and retailers will accept fruit that they would have rejected in normal supply conditions. The bananas pictured in Fig. 11.2 have been rejected as too bent. This is a clear illustration that these criteria are purely cosmetic and a cause of waste.

Fig. 11.2.  Bent bananas. From left to right: Sarah Cantwell, Hannah Ditton, Shayal Sharma, Sarah Blagrove.

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Table 11.1.  General appearance and minor defect product specifications for hybrid Cavendish bananas General appearance criteria Colour

Uniform colour within cartons, with summer and winter differences allowed

Visual appearance

With normal-bright bloom

Sensory

Firm, not soft, nil foreign smells or tastes

Shape

Slightly arched, with blunted butt end and intact, undamaged necks. Nil with double pulps or sausage shapes

Size

Finger length, measurement is over curvature, pulp to pulp, across the back of the banana: X large, 220–260 mm: Large, 200–220 mm, Clusters 3–9 fingers (ideal 5–9 fingers)

Maturity

Finger maturity thickness: measured at right angles to the curve of the fruit at a point one-third from its flowering end. Girth 30–40 mm

Minor defects Physical/pest damage

With dry brown scab (insect damage) or with scars (due to hail, bird damage) affecting areas > 2 cm2 (per cluster) With reddish-brown blemishes (banana rust) affecting areas > 2 cm2 With dark sap stains affecting > 4 cm2 (per cluster)

Physiological disorders

With reddish-brown discolouration (maturity bronzing) affecting areas > 4 cm2 (per cluster)

Skin marks/blemishes

With superficial bruises (< 1 mm deep), abrasion or rub damage (tan/brown/black) affecting > 4 cm2 (per cluster)

Empirical evidence of cosmetic waste What is conventionally called a waste audit was undertaken on a large Queensland banana farm. Over the period of an 8 h shift, the waste stream at the banana packing shed was tallied. The categories used to tally the bananas were based on the ABGC classification system used by staff in packing sheds throughout north Queensland to classify bananas and determine which are deemed satisfactory to send to market. Bananas that were discarded due to the presence of a cosmetic imperfection and nothing else were classified as ‘edible’, with the remainder of discards (such as fruit cut in harvesting) classified as ‘inedible’. The waste audit was conducted once in summer (December 2008) and then again in early spring (September 2009) to account for potential seasonal variation. There is little reason to expect variation other than extreme climate events. The results presented are an average of the two audits.

Nutritional analysis The total production of bananas from north Queensland was obtained from the 2008–09 Agricultural Commodities report and the results from the waste audit used to estimate the total amount of waste that was attributable to bananas not meeting cosmetic standards. The weight of an average banana (136 g) was then used to estimate the amount of selected nutrients contained in the waste. The Australian Recommended Daily Intakes (RDI) and the Australian Guide to Healthy Eating were then used to determine the opportunity costs of the wasted fruit in terms of the number of people for whom the waste bananas could provide daily requirements.

11 – Waste not, want not: the case of the bent banana

Life Cycle Assessment Life Cycle Assessment (LCA) is a tool used to understand and evaluate the environmental impacts in the total supply-cum-disposal chain of a product. Truncated LCAs are common, particularly if the goal is to analyse only one part of the supply chain. In applying a LCA framework to the banana industry, the focus is the growing, processing and distributing of the fruit. The International Organization for Standardization’s ISO 14040: 2006 framework for LCA was used to guide the LCA for banana production. The north Queensland industry-wide total of bananas discarded due to cosmetic imperfections was chosen as the ‘functional unit’, as the jargon describes the subject of study. The aim was to quantify the embedded resources and pollution in the wasted portion of the bananas so as to highlight the environmental and economic impacts of the unnecessary cosmetic standards. The scope of the analysis included greenhouse gas (GHG) emissions, energy, abiotic resources and water use. The Queensland Government Department of Primary Industries and Fisheries (DPI&F) in Cairns gave consent to use their banana production data. The data include the average quantities and costs of the basic inputs required to grow bananas in north Queensland. The first author validated these data in face-to-face interviews with growers, and made some minor modifications based on their recommendations. A local agricultural produce store was visited to validate the costs and application rates of the various agrichemicals, and two aerial spraying contractors were contacted to gather information on the volume and type of fuel used to spray a hectare of banana plantation. These data were then entered into SimaProTM Life Cycle Assessment software version 7.1 (Product Ecology Consultants, Amersfoort, The Netherlands), which converted the raw data using the Eco invent database contained within the software package. This provided a list of the cumulative inputs and outputs that had gone into the production of one functional unit throughout its lifecycle. To calculate the emissions from various on-farm activities, the Australian Department of Climate Change emissions factors were used and values converted to carbon dioxide equivalents (CO2-e) using the Global Warming Potential figures generated by the Intergovernmental Panel on Climate Change.

Economic assessment Using the DPI&F production figures and the statistics mentioned, the total costs incurred by the north Queensland banana industry in 2008 were calculated. Based on a conservative estimate of 20% waste, and the results from the on-farm waste audit, the percentage of total production wasted due to cosmetic imperfections was calculated. A dollar value was then assigned to the edible fraction of the waste as a proportion of the total costs of onfarm production. A total of 4138 waste bananas were identified in the first audit, with a larger number of 9761 in the second audit. The reasons for discarding bananas varied, with only 22% of the discarded bananas being genuinely unsellable. The majority of the waste (78%) was considered edible as it was discarded due to minor exterior imperfections. A banana can be too bent! Based on the estimate of total waste being 20%, this equates to 15% of total production being discarded on the basis of cosmetic appearance. Minor blemishes made up 83% of the edible waste, with other characteristics such as size, shape and the formation of ‘doubles’ or ‘triples’ making up a further 7%. To put these results into perspective, in 2008–09, 264  725 tonnes of bananas were grown in north Queensland. Fifteen per cent of total production equates to 37 000 tonnes of edible bananas being discarded on-farm due to cosmetic imperfections. Based on the

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weight of an averaged sized banana (136 g), this is equivalent to providing 373 000 Australians with the recommended two servings of fruit per day for an entire year. It is important to note that some farmers do utilise this ‘waste’ in several ways, including feeding livestock, selling to local processors to pulp, selling at roadside stalls, making compost, spreading back in the paddock as mulch, or simply dumping in a fallow field to rot. However, there is little to no financial return to farmers, and given the large amount of inputs required to produce bananas, this is not an efficient use of finite natural resources (fuel, fertilisers and farmers’ time) plus the renewable, but nevertheless valuable, resources such as soils and water.

Nutritional costs Opportunity costs are associated with this waste in terms of the number of people it could potentially feed. Table 11.2 gives a summary of the lost nutritional potential of the wasted fruit in terms of the number of days’ worth of RDI the waste could provide and the number of people this would feed for a year. While it is recognised that bananas alone would not be able to supply a person with optimal nutrition for an entire year, the above calculations demonstrate the extent of the waste in terms of lost human nutritional benefits.

Environmental costs The results of the LCA indicated that the use of fossil fuels to power vehicles, generate electricity and produce pesticides were the major sources of environmental externalities. The GHG emission from the 37 000 tonnes of edible waste bananas was 16 300 tonnes of CO2-e, which is equal to the annual emissions from 3130 medium-sized cars. The virtual water content of the waste was calculated to be ~11.2 gigalitres, most of which was attributable to the water used directly on the crops via irrigation (blue water) or rain (green water). The Table 11.2.  Nutritional value of wasted bananas and associated opportunity costs

Nutrient

Unit

Amount in average bananaa

RDI/ AIc

Opportunity cost (million days)d

137 billion

10 300 f

13.3

Opportunity cost (people/year)e

Energy

kJ

Protein

g

1.50

408 million

55.0

Fibre

g

3.50

952 million

28.0

34.0

93 200

K

mg

Mg

mg

Se

µg

Folate

µg

Vitamin C

mg

505

Amount in waste bananasb

487 37.0 1.40 27.0 8.70

7.42

36 500 20 300

132 billion

3300

40.1

110 000

10.1 billion

370

27.2

74 500

380 million

65.0

7.34 billion

400

18.4

50 300

2.37 billion

45.0

52.6

144 000

5.86

16 100

RDI, Recommended Daily Intake; AI, Adequate Intake a Based on a 136 g banana with 36% inedible skin b Based on the 15% of production considered to be edible = 37 000 t/year = 272 million average bananas/year c Based on an average of the male and female Australian RDI for adults aged 31–50 years d Measured in terms of the number of days’ worth of RDI the waste bananas could provide e Measured in terms of the number of people for whom the waste could provide the RDI for an entire year f Based on the average energy requirements for male and female adults aged 19–60 years as outlined in the Australian Guide to Healthy Eating (Australian Government Department of Health and Ageing and National Health and Medical Research Council 2015)

11 – Waste not, want not: the case of the bent banana

waste also embodied non-renewable resources including 987 tonnes of oil, 746 tonnes of coal, 1.26 million m3 of natural gas and 477 tonnes of phosphate ore, the majority of which were attributable to fertiliser applications. In light of the challenges facing the global food supply system, this unnecessary waste of non-renewable resources, water and the GHG emission is unnecessary, unsustainable and avoidable.

Economic costs The average cost of production was estimated by DPI&F and the growers interviewed to be about $18 per carton. This was based on the total cost of inputs to the farmer, divided by the volume of produce sold. Therefore these calculations also include the costs to produce the waste fruit. Based on these data, for every carton of bananas sold, the bananas that are discarded due to cosmetic imperfections represent a loss of $1.32 per carton to the farmer. This equates to an industry total of $26.9 million for the year 2008. Since banana growers are price-takers in normal years (i.e. changing supply has little influence on price at market), it is unlikely that farmers are able to pass these extra expenses on to the consumer by demanding a higher price. This loss of return on investment ultimately affects the viability of smaller growers.

Implications for public health nutrition The case study, while limited in its scope, illustrates the significant environmental, nutritional and economic impacts associated with the cosmetic standards set for fruits and vegetables by the major retailers in the rich world. Given that bananas represent only 7.5% of annual edible horticultural production in Australia and a meagre 0.235% of global banana production, it would be reasonable to assume that the impacts of product specifications are far greater than the values reported here. In light of the claims made by the FAO that food production needs to increase by 70% over the next 40 years, this waste must be a concern for agronomists, economists and public health nutritionists. A

Box 11.1: The UN recognises the problem The United Nations Environment Program in its publication The Environmental Food Crisis (UNEP 2009, p. 29): By using discards, waste and other post-harvest losses, the supply of annual animal and fish feed can be sustained without expanding current production, simply by increasing energy efficiency and conservation in the food supply chain. There has been surprisingly little focus on salvaging food already harvested or produced. Another important question centres around the percentage of food discarded or lost during harvesting, processing, transport and distribution as well as final sale to consumers. Reducing such losses is likely to be among the most sustainable alternatives for increasing food availability … Wasting food is … also a significant contributor to global warming once in landfills, which are the largest source of methane emissions.

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paddock-to-plate understanding of the food system is a starting point. Such an approach recognises the interrelationship between biological, social and ecological health. By focusing effort on all three areas, sustainable and equitable solutions can result.

Conclusions Only recently the United Nations Environment Program recognised the problem of food waste and suggested how it could be utilised (see Box 11.1). As demonstrated by the case study, the unnecessary waste of edible food due to cosmetic standards results in an increase in the costs of production, a loss of potential nutritional benefits and a waste of the resources embodied in the product. In a greenhouse-gas constrained environment with finite natural resources, and an increasing population, this waste is simply neither economically efficient nor sustainable. This we have shown. We don’t accept that cosmetic reasons are valid excuses to discard food.

SECTION 4 AUSTRALIA’S AGRICULTURAL EXPORT PRODUCTS

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12

Growing grains in Australia S. Blagrove

Introduction Grains are the foundation of the human diet, serving as critical inputs for both animal feed and consumer products. There are rising expectations of not only increased yield and quality, but also for the demand for grain. A doubling of global supply by 2050 from the present level of 2.5 billion tonnes is mooted as necessary to meet the increase in human population. Whether this is achievable or not can be questioned. Currently maize, wheat, and rice constitute nearly two-thirds of the global human diet. Other important grains are barley, sorghum, lupins, oats and oilseeds. In recent times some grains have come to be used for ethanol production. This led to a ‘food versus fuel’ debate, but as more data and analysis occurred the heat was taken out of the issue. This is not to say it won’t arise again. A great deal of pressure will be put on existing agricultural practices to increase yield to meet future demand. Close to half the world’s grain is produced in three countries, China, the United States and India. More than one-half of the world’s harvested area is covered by cereals. As a food crop, wheat covers more of the Earth’s surface than any other crop. Maize is number one in covering the globe, but much of it is grown as animal feed. Rice is the number two crop in quantity terms, once we exclude the maize eaten by livestock and grown for ethanol production. Per capita incomes are rising in China, India and several other developing countries, and this is driving demand for cereals more so than most other foods. In this context, there is a role for Australia. The country has a reputation for producing high-quality produce, with grains being no exception. It produces far more grain than the domestic market requires, and benefits from being capable of exporting a large surplus. But whether Australia has the ability to produce even larger quantities of grains so to be a significant supplier to feed the exponentially growing number of mouths in several developing countries has to be evaluated, not taken as given. In Australia, the major grains grown and consumed domestically or exported are wheat, sorghum and barley. Only a small amount of rice is grown and, therefore, rice is not discussed in this chapter. Australian wheat has a reputation for quality in international markets. Wheat is generally grown in temperate climates; Australia is well served with these. It is a hardy crop suited to a wide range of environmental conditions, and Australia is able to grow wheat in many parts of the country. Its wheat farms are of considerable size. 149

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The size of farms allows for large-scale cultivation and, just as important, the construction of large-scale silos; so many of them that long-term storage is possible for considerable quantities of grain. This is an advantage in meeting a smooth demand in importing countries, and can help even-out price fluctuations. While a small amount of wheat is used for animal feed and a tiny amount for bio-fuel, it is the main food crop in many parts of the world. The hard white wheat varieties are particularly suited to food products that are in demand in East Asia, such as instant and fresh noodles. This is predominately where most of our wheat exports end up.

Wheat Wheat is a cereal plant originally derived from a native grass of the Middle East, and has been grown in Australia since the beginning of European settlement over 200 years ago. It is currently Australia’s top exported agricultural commodity and one of the most widely farmed crops in the nation, with 24 Mt produced annually. Much of Australia’s arable land, from the sub-tropics to the vast temperate zone, is suitable for wheat production. This is land on which other crops can also grow, such as sorghum, barley and a few less important grains, but can readily be turned to wheat cultivation. This is where economics comes into play. World prices relative to the production costs are a key determinant of what cereals are grown, or whether land is converted back to grazing country or kept in cultivation. Of the 24 Mt of wheat grown annually, Australians consume 5 Mt, with the remainder exported, primarily to the Middle East and Asia. Australia, after the United States and Canada, is the world’s third largest wheat-exporting nation. As a country with much land suitable for wheat production and not a great deal of domestic demand, wheat exports must be considered a long-term mainstay of the Australian economy. The wheat industry does not have the money-making image of beef exports or novelty to grab public attention like dairy products to China, but it will remain a strong dollar earner when the other products are fighting for a foothold. If Australia were to rely on one crop to earn significant foreign exchange well into the future, it would be wheat. If yields can be improved or costs reduced, all the better. Keep in mind, we face serious competitors.

What is wheat? Wheat is an annual and self-pollinating crop belonging to the genus Triticum. There are several hundred varieties. Popular varieties grown in Australia include the common bread wheat (Triticum aestivum) and durum wheat (Triticum turgidum). The wheat grain itself is the reproductive unit of the plant and is made up of the seed coat and aleurone layer (or bran), endosperm and embryo (germ). In most varieties the proportion of components making up the grain is typically 14% seed coat, 83% endosperm and 3% embryo (NSW Department of Primary Industries 2007). The endosperm is of most use when wheat is milled for the production of flour, as it makes up the bulk of the grain and stores the starch and protein. When mature the wheat grain consists primarily of carbohydrate starch (97%). The protein content varies between 8 and 15% depending on the final grain weight (usually between 4 and 10 mg), a key feature in deciding wheat’s final use (NSW Department of Primary Industries 2007). All wheat varieties have a fibrous root system that penetrates deep into the subsoil. The stages of growth and development correspond with particular seasons and climatic conditions, where the germination process may start and stop in response to moisture content in

12 – Growing grains in Australia

different soil layers. As a result of this, there can be major crop failures anywhere around the world. If we are lucky the failure in one continent (say, North America) is compensated by a very good season in another (say, Australia).

A little history The first ever cultivated wheat emerged around 12 000 years ago in Turkey and adjoining areas of the Middle East. This was at a time when very cold and dry weather adversely affected normal hunting of animals and gathering wild fruit, and left hunter-gatherers no choice but to forage for and eat local grasses. Of the grasses available the plant einkorn (Triticum boeoticum), today referred to as the wild species of wheat, was eaten. Exactly when or why some seeds were planted rather than consumed, we are not sure. That is, we cannot put an exact date on the commencement of farming. Over much time (we are talking thousands of years), nature’s power of cross-pollination and hybridisation, helped strongly by selective breeding, resulted in the common bread wheat plant (Tricitum aestivum) that we farm today. The result is a grain high in carbohydrates, essential amino acids, and vitamins B and E. Australia’s first wheat crop was sown by convicts at a government farm (now the Sydney Botanical Gardens) located in the heart of Sydney. Initially farming of wheat proved to be a considerable challenge, as the environmental conditions in Australia were poorly understood. They were very harsh compared to the conditions in England, Scotland and Ireland with their abundant rainfall and deep, fertile soils. Infertile soil, plant diseases, low and unreliable rainfall, lack of farming tools, labour shortages, the need to clear densely vegetated land, and importing seeds from plants grown in a different climate, were the problems encountered. It became recognised that the proper preparation of the land and obtaining the appropriate wheat seed varieties were key to achieving successful yields. Practices began to change, as novice Australian farmers learned by experimentation. The early farmers worked hard. Fields for sowing had to be cleared. Trees were felled by axes and then burnt. Cultivation was done manually by hoe. The grain was sowed by hand, usually in late autumn. In December the crop was harvested using hand sickles. It was bound into sheaves, carried on workers’ backs to a barn where it was threshed and winnowed. The latter required tossing it into the wind, which did the job of separating the grain from the chaff. These methods, as old as antiquity, were practised in Australia into the 20th century. The Australian gold rush in 1850s with the influx of fortune-seekers to outback ‘diggings’ stimulated the expansion of the wheat industry and other agricultural pursuits. The gold diggers had to be fed. Wheat made bread. Add the vegetables produced by the Chinese market gardeners, who had come to seek gold but found more reliable money-making opportunities, and the job of feeding the miners was done. It was not only the huge goldfield population that needed to be fed. The rapidly growing city populations of Sydney and Melbourne led to a significant increase in the demand for wheat. A range of agricultural implements resulted in the mechanisation of grain farming. With new infrastructure including railways and ports being built, large-scale exports commenced. Eventually bulk grain handling systems were developed and in subsequent decades much improved farming techniques were introduced, bringing the wheat industry to what it is today, the largest and most valued grain crop grown in Australia. The expansion in production over the past 40 years has been exceptional, from 7 million ha in 1991– 92 to 14 million ha at present.

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Growing characteristics As Australia is a large country, the climatic and soil conditions differ immensely from state to state, and region to region, as discussed in previous chapters. Wheat is grown in all states of Australia (not in the territories) within an enormous stretch of land (46 million ha), totalling over 6% of Australia’s total land area. This is known as the ‘wheat belt’ (or ‘grain belt’), and is a narrow curve of land that extends from central Queensland through New South Wales and Victoria, encompassing the mainland crescent of the Great Dividing Range, then into South Australia, plus the south-west of Western Australia. A small portion of Tasmania is farmed for wheat. What is today commonly called the ‘wheat belt’ was, until the dramatic decline of the wool industry in recent decades, known as the ‘wheat–sheep belt’. The very high prices for wool after the Second World War and during the Korean War resulted in much wheatcultivated land reverting to sheep grazing. This points to the fact that these two farming pursuits are substitute users of land, although grazing land has to be cleared and ploughed before it can be cultivated, and if wheat land does not have a shearing shed this has to be built if sheep replace wheat. As noted above, other grain crops and cotton are also substitute crops on ‘wheat’ land. Once large wheat farms have been established, it is unusual to switch to other cereals but common to plant suitable rotation crops as discussed below. Wheat growing areas are determined by specific soil type, soil fertility, topography and rainfall. Typically suitable areas have a Mediterranean climate with adequate rainfall, particularly in the flowering season, and a mild climate. Wheat yield and high quality production is highly dependent on rainfall during winter and early spring (a minimum average of 400–600 mm per annum), in order to provide sufficient nutrition for the growth phase in the warmer months. Waterlogging is essential to avoid, hence wheat is not grown on the coastal subtropical and tropical plains of Australia. However, there has to be sufficient water. Irrigated wheat is grown in some parts of Queensland and New South Wales (Dalby, Emerald, St George, Goondiwindi, Walgett, Gunnedah). Alternatively in other areas, the crop is dry grown (rain-fed). In this case there is greater variation in crop yield, largely due to the variation in weather conditions and in rainfall patterns year-by-year. Farmers use modern technology to help predict rainfall and monitor the soil and growing conditions; however there are no guarantees. They are inevitably dealing with probabilities. When no rain falls in an area without irrigation, there is a very real challenge in producing a quality crop, that is if a crop can be produced. This is the hardship of grain farming. Some very important factors are out of the farmer’s control. The wheat plant takes ~5–6 months to mature, ripen, and become a golden colour. A mature field of wheat is a delight to the eye. One can but conclude that the soil is good and the farmer most competent. Both the sowing and harvesting periods differ between regions of Australia due to slightly different climatic conditions and seed types (see Table 12.1). Wheat is commonly Table 12.1.  Generalised sowing and harvesting periods Region

Sowing period

Harvesting period

Queensland

Early April–July

Early August–late December

New South Wales

Early May–end June

Early November–late December

Victoria

Mid May–late June

Early October–mid February

South Australia

Early May–late June

End of October–mid-late January

Western Australia

Late April–June

Mid October–early January

12 – Growing grains in Australia

grown as a rotation crop, where there are periods of fallow or the growing of alternative crops. Crops such as lupins, rapeseed/canola and field peas are common rotations used due to their natural nitrogenous input to the soil. In other cases sheep or beef cattle can graze the once-cultivated and harvested land for a period before the next crop is planted. Farmers employ careful management techniques and crop rotation schedules, as the continued growing of one crop type on the same land has the potential to cause deterioration of the soil condition and encourage pests and diseases. There is a need to make careful decisions each year before choosing a suitable rotation crop. The key factors include potential diseases, pests and weeds, seasonal weather forecasts, current crop prices, and water stored in the soil.

Planting the seeds The depth of sowing wheat seeds needs to be strategically planned. It usually ranges between 25 mm and 50 mm depending on soil type and moisture content. Deep sowing will delay or smother the seed, while shallow sowing will increase the risk of seed damage from herbicides if they are applied. The distance between the rows of the seeds is also important. A seeding rate between 150–200 plants per square metre is most common (Victorian Government Department of Environment and Primary Industries 2012b), but will vary depending on the specific environmental conditions of the field. Adequate phosphorus and nitrogen levels are crucial during the early developmental stages of the plant. If the soil is deficient in either it will have to be fertilised. Take an example of Dalby on the Darling Downs, which is traditional wheat country. Nutrient deficiencies are primarily nitrogen, phosphorus, potassium and zinc, and less commonly sulfur, copper and molybdenum (Queensland Government Department of Agriculture and Fisheries 2012). Table 12.2 illustrates the importance of nitrogen, as it is directly associated with the grain’s development of protein. In irrigated cropping large quantities of nutrients are removed with the crop or simply lost from the cultivated area in run-off, and thus replacement is essential. Farmers can control the natural nitrogen build-up in the soil by paying attention to soil organic matter, fallowing, soil type, moisture content, time of year and tillage methods. Classes of Australian wheat Wheat is categorised into different classes based on its grain hardness, quality, and suitability for different end uses, with classification achieved determined by growing conditions and environmental factors such as soil type. Grain class determines how the grain will be processed. Grains are sampled and tested for protein content, weight, hardness, colour, shape and defects. Protein content (gluten) is an important factor in influencing the end use of wheat and its value in the market. This is assessed using infrared (NIR) technology on delivery to the local silo. Generally, wheat having 11–13% protein is used for Table 12.2.  Wheat protein levels to indicate nitrogen (N) deficiency Grain protein (%)

Indicated N supply

12.5

N not deficient

Greater yield is likely to be produced with more N added to the soil Source: Queensland Government Department of Agriculture and Fisheries (2012). a

153

>10

10–12

Australian Premium White (APW)

Australian Standard White (ASW)

9.5–11.5 9.5–11.5b

Australian Noodle (ANW) Australian Feed (FEED)

Western Australia Queensland New South Wales Victoria South Australia Western Australia

Queensland New South Wales Queensland New South Wales Victoria South Australia Western Australia Queensland New South Wales Victoria South Australia Western Australia Southern New South Wales South Australia Western Australia Queensland Northern New South Wales South Australia Western Australia

States grown

Japan, Korea Local

Local

Italy, Morocco, Algeria

Indonesia, Malaysia, Japan, Korea, other Asian countries, plus Iraq, Iran and other Middle Eastern countries Japan, Korea

Japan, Korea, Thailand, Malaysia, Italy Japan, Indonesia, Iraq, Malaysia, Middle East

Markets

Confectionery and baked products including sweet biscuits, cookies, pastries, cakes, steamed buns, extruded snack foods White salted noodles, udon noodles Stock feedc

Wet and dry pasta products, Middle Eastern and North African products

Middle Eastern breads, Indian specialty breads, Asian steamed breads, instant noodles

Middle Eastern flat and pocket breads, Indian specialty breads, variety of Asian noodles

European bread, high protein flour, yellow alkaline noodles, wonton skins European pan and hearth breads, Middle Eastern flat breads, yellow alkaline noodles, steamed bread products

Export product use

c

b

a

The protein level of Australian wheat is expressed at 11% moisture basis Varies depending on whether it is grade 1 (11.5%), grade 2 (10.5%), or grade 3 (9.5%) Not suitable for milling Sources based on: Australian Government Office of the Gene Technology Regulator (2014); Wheat Quality Australia (2011); Queensland Government Department of Primary Industries and Fisheries (2009).

9.5–10.5

Australian Soft (ASFT)

>13

>11.5

Australian Hard (AH)

Australian Durum (ADR)

>13

Protein (%)a

Australian Prime Hard (APH)

Wheat class

Table 12.3.  Australian wheat classes, key characteristics and markets

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pan bread, 10.5% for udon noodles, and 8.5–9.5% for sweet biscuits and cakes (Queensland Government Department of Primary Industries and Fisheries 2009). Quality characteristics of different wheat classes are described in Table 12.3. The markets are also identified. Wheat classes can be further divided into the seasons in which they are grown – spring (there is also the use of the term ‘summer wheat’) and winter. The main difference between spring and winter wheats is that winter wheat needs a period of cold weather, whereas spring wheat does not. Thus in Australia winter wheat is planted in the autumn, where ground temperatures can reach to below freezing, allowing the seed to form inflorescences or spikes (vernalisation). Spring wheats can be planted at the end of winter, where vegetative growth will be maximised. It is essential to ensure that flowering does not correspond with late frosts, as this will damage and potentially kill the wheat flower.

Wheat breeding Wheat breeding has been a major contributor in establishing a successful wheat industry in Australia, as it has been worldwide. As the environmental conditions differ across the Australian wheat belt, researchers have had to ensure that the wheat breeds were not only high yielding but also suitable for diverse conditions. Australian farmers specifically choose wheat varieties suited to their environment, with there being hundreds of varieties to choose from. Plant breeding involves changing particular genetic traits of the plant, with the aim of producing desirable characteristics for specific environmental conditions. Another major objective of wheat breeding programs is to develop varieties resistant to diseases. Disease has been a major problem in the past, with stem and leaf rust reaching epidemic levels in Australia during the early 20th century. The incorporation of disease resistance traits into wheat varieties has had a significant impact in reducing diseases such as the cereal cyst nematode. Disease-free traits also allow for more frequent sowing of wheat, as rotation crops do not need to be used to mitigate the cycle of diseases. Today, much of Australia’s wheat and other grain breeding is guided by the Grains Research and Development Corporation (GRDC). Australia predominantly grows whitegrained wheat varieties that have a greater rate of flour extraction than the red-grained wheats. The dominant wheat types are commonly known as bread and noodle wheats (Triticum aestivum) and durum wheats (Triticum durum). Soft wheats and feed wheats are grown, but in smaller quantities. Diseases and pests Leaf and stem diseases and other pathogens have the potential to dramatically reduce the quantity and quality of grain yield. Within Australia, the six major diseases of wheat in order of average annual economic losses per year (shown in brackets) are Septoria nodorum blotch ($58M), crown rot ($56M), take-all ($52M), yellow spot ($49M), cereal cyst nematode ($37M), and root lesion nematode ($36M) (Australian Government Office of the Gene Technology Regulator 2014). Disease is most prominent in the wetter and colder seasons, when large amounts of inoculum14 exist in stubble or volunteer hosts. Location of disease losses around Australia varies. In Queensland, root lesion nematode causes an average loss of 8% of the crop, but losses are considerably lower in other states. Pests include insects and mammals and are usually opportunistic, except pests found in stored grain (includes mice and various weevil species). In order to minimise disease, growers need to select the appropriate variety for the area, or be prepared to spray with fungicides throughout the season.

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Where from here: how can Australia enhance wheat supply for future demand? Australia’s ability to expand wheat yield for future domestic and export demand is dependent on available land and environmental conditions, particularly in relation to soil moisture profiles and rainfall. There is the prospect of expanding our cultivation to areas with lower soil fertility; however, would it not be more beneficial to instead aim to increase our yield on existing farmlands with their better soil profile? This is the cost– benefit analysis needed, and is likely to be a region-by-region, if not farm-by-farm, exercise. Given the significantly different environmental and climatic conditions in which Australia wheat is successfully grown, one size does not fit all. Some of the big questions are summarised in the following one question: How can farmers work with nature to ensure higher annual yields, yet avoid depletion of the soil profile, soil fertility and the overuse of inputs? Without anticipating the results of a comprehensive cost–benefit analysis, there are some likely winners. The intensification of wheat crops that are already under production is possible, particularly in areas where soil and climatic conditions are the most favourable. So, why not grow more using less water inputs? How cost-effective are various irrigation alternatives? Areas where wheat is rain-fed are a different case. Here climatic characteristics can be exploited to their greatest capacity to achieve high yields. Within New South Wales, South Australia, Victoria, Tasmania, and a small portion of Western Australia, some farmlands experience high rainfall. Why not take advantage of this and seek to expand the area under cultivation in these locations? Why not avoid irrigation in places that already have ample rainfall? If a wheat crop had the ability to use more of the annual rainfall, and attain a greater yield per millimetre of that extra water, it has been estimated that the yield would increase by 25% (The Conversation 2013). Numerous other ideas spring to mind. New cultivars allow seeds to be sown at greater depths where the subsoil remains moist much longer than the top soil. Simple methods including weed control, controlled traffic, precise GPS-guided sowing, and retaining stubble of the previous year’s crop are effective in increasing water in subsoil and increasing yields. Substantial increase in wheat yield will be necessary if Australia is to retain its high global ranking in the production and export of wheat. It should be possible to achieve this goal, but strategic and innovative practices will need to be adopted. These are going to be necessary whichever of the following three options are pursued: substituting wheat production on land presently cultivated by other grain crops; converting extensive grazing land into cultivations by dam- building and irrigation; and increasing yields on existing wheat farms. While these are the supply-side issues facing Australian wheat farmers, farmers must also have a keen eye to what their competitor wheat-growing nations are doing. This refers not just to the usual suppliers but also to Russia, Ukraine and other regions where wheat land is presently idle. They will also be seeking to benefit in response to a shift outwards of the wheat demand curve. In free-market economies, there is no imperative for a smooth transition to a new demand–supply equilibrium at a fair price for all. In other words, expect a bumpy ride.

Sorghum Sorghum (Sorghum bicolor (L.) Moench), native to tropical areas of Africa, is a self-pollinating plant belonging to Andropogonae of the grass family Poaceae. The word ‘sorghum’ originates from the Latin ‘Syricum (granum)’, meaning ‘grain of Syria’. Sorghum is the

12 – Growing grains in Australia

fifth most prominent grain in the world after rice, wheat, maize and barley. For centuries sorghum has been a staple grain for poor people in rural regions of the semi-arid tropics of Africa, and of Latin America and Asia. This is because it has the ability to withstand drought, soil toxicities, and temperature extremes. Kernels of sorghum show great diversity in colour, shape, and anatomical features. There are over 30 subspecies and hybrids. It is very versatile, being an important component of human and livestock diets as grain, foliage or in sweet syrup form. In the developed countries the most common use for sorghum is for livestock feed, primarily for poultry, pigs and cattle. The high starch content makes sorghum valuable for brewing and bio-fuel production. There is an ethanol plant on the Darling Downs that uses sorghum as its feedstock. The Chinese purchase Australian sorghum to brew. It is believed that the oldest cultivation of sorghum occurred in north-east Africa (in Egypt and the Ethiopia–Sudan border region) on savannah land ~5000 years ago. From there it spread. The Bantu people carried sorghum to the savannah country of southern and eastern Africa. Sorghum was first exported from north-east Africa to India during the first millennium as a grain food source. It was introduced to the western world when African people were brought to the United States as slaves, and they planted sorghum seeds to grow their own food. Today, grain sorghum is the number three cereal crop in Australia. It is a summer crop. Production varies from year to year in response to irregular rainfall patterns, and area sown varies according to farmers’ reactions to price fluctuations for sorghum and other grains that can be grown on the same land. Price changes can be dramatic. Over the period 2005–2015 the price of sorghum has varied from $80 to $300 per tonne. While this range of price fluctuation keeps farmers awake at night, they have, nevertheless, come to believe that sorghum is a profitable crop as the following numbers illustrate. Since the Second World War, Australia has seen an immense increase in sorghum production, expanding from 200 000 ha to currently over 700 000 ha, two-thirds of which is in Queensland. Sorghum was first grown in Queensland in 1938 using dwarf varieties introduced from the United States. These dwarf (otherwise short-stemmed) varieties do not suffer from ‘lodging’, that is, having the seed head tip the plant to the ground and out of reach of the mechanical harvester.

Growing characteristics: physiology of the yield Within Australia, almost all sorghum is grown in Queensland and northern New South Wales. A small area exists in Kununurra, north Western Australia, and also a little is grown in the Northern Territory. Grain sorghum, both rain-fed and irrigated, is usually grown on heavy clay soils or cracking black soils in tropical and semi-tropical regions. These soils are capable of holding large amounts of water, and as a result the plant obtains moisture throughout the drier months. Methods of no-till and ‘controlled traffic’15 are practised, as they increase soil moisture storage at greater depths. Less soil compaction and a higher soil moisture content results in an increased yield. Deeper cultivation is needed when the soil layers are compacted. Quantities of water for a fully irrigated crop will vary depending on climate conditions in that particular season; typical applications are 1.4  ML/ha for pre-irrigation and three irrigations of 1.2  ML/ha during the growing season. Yield can reach a maximum of up to 12 t/ha with irrigation. The sorghum season is about four months, from sowing to harvest. Planting time depends on the location, but in Queensland sorghum is sown from September onwards, and the last to be harvested (in June) would have been planted in late February.

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Fig. 12.1.  Harvesting of sorghum.

There are multiple uses for the by-products of a sorghum crop following the harvest. It is common for stubbles of sorghum plants to be grazed following harvest, especially when cattle prices are high. Sorghum stubble can also be baled for hay during times of drought. Figure 12.1 captures the view from a harvester of a sorghum crop being harvested. As sorghum is a perennial plant, it will continue to grow after it has matured and the seeds are harvested. Therefore before harvesting (when the seed reaches maturity and contains 25% or less of moisture), chemical desiccation (or spray-out) with glyphosate is conducted. This means that the plant is chemically killed when the plant has reached the desired seed size. Desiccation can be used to manipulate the time of harvest. The rotation program on an individual farm starts with a test for nutrient and moisture levels of the soil. Applied fertiliser rates relevant to the soil’s specific requirements can therefore be determined. It should be noted that inputs to soil depend on the specific location, as soil types and the rotational crops that are grown differ between regions. Sorghum is well suited to rotate with pasture legumes. Cowpea and mungbean crops can leave up to 40 kg/ha of additional soil nitrogen, while soybeans can result in residual nitrogen levels of between 25–50 kg/ha. Nitrogen fertiliser is added to the soil during the soil preparation (when hilling up). Low grain protein and poor yield is a reliable indicator of low nitrogen availability in the soil (Table 12.4). It is essential to maintain grain protein to produce a profitable crop. Fertilisers replenish nitrogen levels, but timing of the application is essential, especially for irrigated crops. Nitrogen can be supplied by various sources: in the soil as nitrate, mineralised throughout the growing season, or applied as fertiliser (in the form of anhydrous ammonia or urea). Additional nitrogen and phosphorus is usually applied during the sowing period. Sorghum is tolerant of low levels of phosphorus, but to avoid any major deficiencies an in-crop foliar spray is commonly used. Sorghum is most vulnerable to zinc deficiency, especially following periods of long fallow after a drought. Zinc is added to the soil, typically in the form of zinc oxide, before planting. Sorghum is particularly vulnerable to zinc

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Table 12.4.  Sorghum protein levels to indicate nitrogen (N) deficiency Grain protein (%)

Indicated N supply

10

Satisfactory N levels for high yield. N not limitinga

Greater yield is likely to be produced with more N added to the soil Source: Queensland Government Department of Primary Industries (1987). a

deficiency when the vesicular arbuscular mycorrhizae (VAM) level is low. VAM is a soil fungus that occurs naturally in soil and helps plants with the uptake of the nutrients phosphorus and zinc, and as a result increases plant growth and yield. Thus, VAM reduces the volume of fertiliser needed. The interaction between VAM and soil has a critical role in controlling soil fertility, soil erosion, and plant water stress.

Classes of sorghum Sorghum is classified into four main groups: grain sorghum, sweet sorghum, broom sorghum and grass sorghum. Grain sorghum (Sorghum bicolor ssp. bicolor) is food, predominantly grown in tropical areas, and is used as raw material for alcoholic beverages, flour-based products such as flat breads, and cakes and noodles. In Africa and parts of India, sorghum is cooked as porridge, which can be fermented or unfermented. It is also used to make breads in India, Central America, Sudan and Ethiopia. In Sahelian Africa sorghum is the most common cereal used for couscous. The grain is also used as a major feed ingredient for swine, poultry and cattle, particularly in China and Australia. Some types of sorghum are named according to their prime use. Broom sorghum is used to make grass products from the straw; obviously, brooms. This is mainly the case in the poor countries where straw brooms are still common. Sweet sorghum is used as a material for syrup. Grass sorghum is grown for green feed and forage use, or as silage or hay. In Australia, sorghum’s primary use is as feed for livestock. In terms of feed value, sorghum is similar to barley, maize, and wheat. The available energy is dependent on the capacity of the animal to digest starch. Sorghum is easily digested by pigs and poultry, but poorly digested by cattle. To increase digestibility, the grain is broken up, coarsely cracked or rolled, or steam flaked. Mixing sorghum with wheat and barley also improves its palatability for cattle. Sorghum hybrids The genetics of sorghum has changed dramatically over the years, with almost all seeds sown today being hybrids. Hybrid varieties were grown commercially in Australia as early as 1962, and within three years farmers were on the verge of completely switching to growing hybrid varieties. Most hybrids grow to around one metre in height, have a dominant stem, and several tillers. Their roots can extract water to a depth of 1.8 m. Wild sorghum types, in contrast, can grow well over 2 m in height, are multi-stemmed, and have very small seed heads. Yield potential and the growth cycle are the main factors in selecting hybrids to plant. Disease resistance, and resistance to lodging and to insects, are also important. Disease, pests and weeds Modern sorghum varieties have resistance to disease and pests, however major diseases and pests can still occur. Root and stalk rot and leaf rust diseases are most problematic. Specific diseases include head smut (Sporisorium reilianum), leaf rust (Puccinia purpurea), johnson

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grass mosaic virus, sorghum ergot (Claviceps africana), seedling blight (Pythium spp.), fusarium stalk rot (Fusarium moniliforme) and charcoal rot (Marcophomina phaseolina). Problem pests include various soil insects including black field earwigs (Nala lividipes), wireworms (Orondina spp.), cutworms (Agrotis spp.), heliothis (Helicoverpa armigera), armyworms (Mythimna convecta and Spodoptera spp.), locusts, and the sorghum midge (Contarinia sorghicola) (Western Australian Government Department of Agriculture 2001). Some pests are attacked by predators naturally present in the soil profile, such as parasitoids. The most common means to control these problem insects is to plant hybrids resistant to pests that are specific to the area. Today, over 99% of grain sorghum in Australia has some level of resistance to the sorghum midge (Queensland Government Department of Agriculture and Fisheries 2014b). Weed control is essential in assisting plant growth in the early stages of development. Grass weeds are controlled before sowing, usually via the application of herbicides. Lodging is rarely a problem in fully irrigated crops, but it can be a significant problem for dryland areas. The common cause is moisture stress during the grain-filling stage, when the plant diverts its energy from the stem to facilitate the reproduction process and develop the grain. The stem is weakened and fungal stalk rot occurs. It can lead to plant death, or considerable yield loss at the time of harvest, as the heads are on the ground. Controlled traffic, no-till and stubble retention are practices that aim to maintain suitable moisture levels and therefore reducing lodging.

Barley Barley (Hordeum vulgare L.) was one of the earliest crops to be domesticated and this led to it having an important role in Greek and Roman cultures as a bread-making grain. Gladiators were known as Hordearii, meaning ‘eaters of barley’, because the grain was a staple food in their diet (Garvin et al. 2003). Barley was first cultivated around 7000 to 8000 BCE. It was the primary grain of the human diet in many countries before wheat was cultivated. Wheat went on to surpass it. Barley is second to wheat in Australia in terms of quantity produced. Today barley remains as one of the major crops grown around the world, ranking fourth on the global scale. Australian barley farmers are export-focused, with their exports accounting for ~18% of world barley trade. Barley is a flowering, self-pollinating plant of the grass family Poaceae. The genus Hordeum has approximately thirty species that are indigenous to four continents, with barley being the only domesticated species to have emerged from this genus (Garvin et al. 2003). Barley enters the human food chain through various pathways. In Australia it is largely used for animal feed in the form of both grain and pasture, thereby making a large contribution to meat production. It is commonly fed to dairy cattle and hence plays a role in milk production. It is also fed to swine, poultry, and farmed seafood. Barley is used as a substrate for the production of alcohol, in particular beer. As well as a food input for domesticated animals, a small quantity of barley is used to produce a range of products that directly enters the human diet. Breakfast cereals and bread products are examples. Barley is a rich source of vitamin B, essential minerals, and fibre. The beca-glucan content has various health benefits, such as maintaining a low blood glucose level (especially beneficial for diabetics) and a low cholesterol level. Australia has a reputation for producing a reliable supply of high-quality barley from a clean environment, and as a result its barley is in demand by the malting, brewing, distill-

12 – Growing grains in Australia

Table 12.5.  Generalised sowing periods of barley Region

Sowing period

Queensland

Late April–Julya

New South Wales

April–June

Victoria

April–July

South Australia

April–June

Western Australia

April–June

Tasmania

April–July

In cooler regions of southern Queensland, where most Queensland barley is grown, sowing often occurs in July. Source: Queensland Government Department of Agriculture and Fisheries (2014a). a

ing, shochu (Japanese spirit), and animal feed industries. Domestically, the demand for malting barley is approximately 1 Mt annually, and the Australian domestic feed demand is approximately 2 Mt annually (Barley Australia 2014).

Growing characteristics: physiology of the yield Barley is well adapted to abiotic stresses, and as a result is produced across a broad geographic area. It is a drought-tolerant crop. Within Australia, barley is grown from southern Western Australia to southern Queensland, covering almost 4 million ha of land (Barley Australia 2014). The crop thrives in the red earth soil of these regions. However it also grows well in brigalow clay and heavy clay soils if they are in a region with a moderately cool and dry climate. Weather forecasts and rainfall will determine when barley is planted, but there is a generalised pattern (see Table 12.5). The plant is prone to excess moisture damage in winter. It has a lower frost tolerance than wheat, and thus is often planted earlier in the season to avoid the cooler months. Generally early plantings will produce greater yields, larger grain size and lower protein levels, making it likely to achieve malt quality, despite an increased frost risk (Queensland Government Department of Agriculture and Fisheries 2014a). Harvesting is October to January in all regions. Spring barley in rotation with winter wheat is the most preferred combination for farmers. Seedbed moisture, disease, soil insects, depth of planting, and germination success are all factors determining the results each season. Plant nutrition is similar to other Australian crops, with nitrogen and phosphorus determining crop health, but also zinc, copper, and sulfur have an influence. Malting requires protein levels between 9 and 12%, with higher levels becoming animal feed. A balance between nitrogen requirements for maximising the yield, but not over-fertilising to increase the protein level, is the primary goal of farmers. This requires considerable skill. Table 12.6 indicates the ideal nitrogen supply to achieve certain grain protein levels. Australian barley varieties The variety of barley grown in Australia depends on its end use. The plant will have two or six spikelets (two or six rows of grains) subject to its type. Six-row barley has higher protein content and is mostly used as feed. Two-row barley contains more starch and less protein, and therefore is preferred for brewing. Barley is fed to animals as either grain or pasture on which they graze. Generally around 80% of the grain’s kernel is milled for flour, and the remaining is left for animal feed. Table 12.7 outlines the varieties of barley grown in Queensland and their uses.

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Table 12.6.  Barley protein levels to indicate nitrogen (N) deficiency Grain protein (%)

Indicated N supply

12

N not deficient

Greater yield is likely to be produced with more N added to the soil Source: Queensland Government Department of Agriculture and Fisheries (2014a). a

Improved varieties Crop improvements for both malt and feed markets currently being put into practice or being researched include use of improved barley varieties, advanced breeding lines and germ plasm exhibiting enhanced agronomic performance, disease resistance, abiotic stress tolerance and grain quality attributes. Research by CSIRO has resulted in a new variety of barley (BARLEY Max) that has various health benefits for consumers. It has one of the highest levels of dietary fibre, more than any other of the whole grains, and therefore can contribute to maintaining bowel health. This new variety is also used to produce foods with a low glycaemic index, suitable for people with diabetes. Disease, pests and weeds Barley is susceptible to various diseases, pests and weeds, but these can be managed. Infected stubble remaining at the point of sowing the seed is a common starting point for disease outbreaks and needs to be dealt with before planting. Head and root diseases include crown rot (Fusarium psuedograminearum), covered smut (Ustilago hordei), common root rot (Cochliobolus sativus), root-lesion nematode (Pratylenchus thornei), and black point. Other foliar diseases occur, like rusts, blotches, and powdery mildew. Resistant varieties are available and are the most cost-effective option. However, very few varieties are resilient to all diseases, pests or weeds, and thus management and research continues in search of the ideal solution.

Oilseeds: focus on canola Bright yellow flowers in bloom make canola one of the most distinctive broad-acre crops. Canola is a major broad-leafed rotation crop grown within the grain-producing regions of Australia. It is primarily grown for its oil. It is a plant of the Cruciferae family, developed from the hybridisation of cabbage (Brassica oleracea L.) and seed rape (Brassica rapa L.). The plant is closely related to other Brassica species such as cabbage, cauliflower, kale, and brown and oriental mustard. The name canola emerged in 1979 for varieties of rapeseed that had been made resistant to the fungal disease blackleg and contained low erucic acid levels in the oil.16 Seed rape was first recorded in India in as early as 2000 BCE, and came to be cultivated in other parts of Asia and the Mediterranean (Colton and Potter 2014). In modern times rapeseed oil was burnt to provide light and used as a lubricant in ship engines. By the end of the Second World War, rapeseed oil found a use in cooking. It was first grown in Australia in the early 1960s. Today the canola seed is crushed for its oil, which is processed into various foodstuffs including margarine, cooking oils and salad oils, and blended with olive oil. The oil is low

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Table 12.7.  Varieties of barley in Queenslanda Variety

Location in Queensland

Primary useb

Product use (domestic and export)

Binalong

Central and Southern Downsc Western Downs and Maranoa Goondiwindic Central Queensland

Animal feed

Animal feed

Dash

Central and Southern Downsc Goondiwindi

Animal feed

Animal feed

Fitzroy

Central and Southern Downsc Western Downs and Maranoa Goondiwindic

Malt

Beer, whiskey, malted milk shakes, malted vinegar, confections (Maltesers, Whoppers), flavoured drinks (Horlicks, Ovaltine, Milo), baked goods (malt loaf, bagels, rich tea biscuits), sweetener, cereal

Gairdner

Central and Southern Downsc Western Downs and Maranoa Goondiwindi

Malt

As above

Grimmett

Central and Southern Downs Western Downs and Maranoa Goondiwindi Central Queensland

Malt

As above

Grout

Central and Southern Downsc Western Downs and Maranoac Goondiwindic Central Queenslandc

Animal feed

Animal feed

Kaputar

Central and Southern Downsc Western Downs and Maranoac Goondiwindi Central Queenslandc

Animal feed

Animal feed

Mackay

Central and Southern Downsc Western Downs and Maranoac Goondiwindic Central Queenslandc

Animal feed

Animal feed

Shepard

Central and Southern Downsc Western Downs and Maranoa Goondiwindi Central Queensland

Animal feed

Animal Feed

Skiff

Western Downs and Maranoa Goondiwindi

Animal feed

Animal feed

Tallon

Central and Southern Downsc Western Downs and Maranoa Goondiwindi Central Queensland

Malt

Beer, whiskey, malted milk shakes, malted vinegar, confections (Maltesers, Whoppers), flavoured drinks (Horlicks, Ovaltine, Milo), baked goods (malt loaf, bagels, rich tea biscuits), sweetener, cereal

recommended varieties; some barley varieties may not be included highly dependent on grain protein levels measured before harvest, may differ depending on the season region most suitable Source: Based on Queensland Government Department of Agriculture and Fisheries (2014a). a

b c

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in saturated fats, consisting of mono- and polyunsaturated fats that are considered appropriate for human health. After the oil is extracted for human use, the by-products are used by the livestock industries as meal for pig and poultry feeds, as they are rich in protein, vitamins, and minerals (Victorian Government Department of Environment and Primary Industries 2012a). Canola is considered superior to sunflower meal and pulses. The canola industry in Australia did not focus on exporting until the early 1990s, when exports to China, Europe, Japan, Mexico, Pakistan, Bangladesh and India commenced. Australian canola competes primarily with Canadian products in international markets. Australia produces 2–3 Mt of oilseeds annually. Canola and cottonseed account for nearly 90% of this, and soybeans and sunflower amount to a further 3 and 4% respectively (Victorian Government Department of Environment and Primary Industries 2012a). Australia is the world’s second largest exporter of canola, with a total oilseed crushing capacity of 1.2 Mt per annum, predominately on the east coast, and exporting capacity well over 1 Mt. Within Australia, all commercially grown canola is the Swede rape type (Brassica napus or Brassica juncea). There are some transgenic canola types developed in Australia, with a focus on either the crop production traits or the product quality.

Growing characteristics: physiology of the yield Canola is a broad-acre crop primarily grown across the wheat belt regions of Australia, where there is a temperate climate. Western Australia and New South Wales are responsible for the bulk of Australia’s oilseed production. The yield is limited by water availability (especially during maturation), temperature, and soil nutrient level. The crop is best suited to highly fertile areas free of hard pans, crusting, waterlogging, and subsoil constraints. Acidic soils should be avoided or managed, as canola is more susceptible to low pH and aluminium toxicity than other crops. The application of lime has proven to be successful in dealing with this problem. Sulfur fertilisers are normally applied later in the season, before stem elongation. Nitrogen fertilisers are the major fertiliser cost to farmers. Minor inputs include potassium, boron, molybdenum, zinc, magnesium, and calcium. Canola is different in two ways from other crops: smaller seed size and the need to windrow (swathe) the crop to minimise seed loss. Because the canola seed is so small, the sowing depth has to be very well controlled. It is sown at shallow depths, and covered with a thin layer of topsoil to protect it from drying out before or after germination (2–3 cm of moist soil covering). Press wheels (wheels attached on an agricultural press to compact soil in the seeded furrow) are often used in this process. Windrowing is needed because canola is very vulnerable to wind damage, resulting in high seed loss. The sowing period ranges from April to June, and the harvesting period is between October and December. Canola is often grown in rotation with other crops. The growth of other crops is enhanced if planted following a canola crop. This is as a result of ‘disease cleaning’ that occurs when crop rotation is employed. If canola is irrigated, achievable water use efficiency targets are set in place (if flood irrigated, usually 8–10  kg/ha/mm) (GRDC 2009). This is in conjunction with raised beds, border check (flat) systems, terraced contours, and spray irrigation methods. Disease, pests and weeds The major threat to canola farming is blackleg, which can significantly reduce yields. It is more common in regions with higher rainfall, with research showing that 95–99% of blackleg spores originate from canola stubble of the previous year (GRDC 2009). The most effective way to avoid or mitigate this is to grow resistant varieties, in combination with

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appropriate fungicide treatments (if needed). There are also a number of mites and insects that can potentially harm and attack a canola crop; most are of little concern and require minimal control measures. Pests may include aphids (turnip, cabbage and green peach), Rutherglen bug, and helicoverpa (Queensland Government Department of Agriculture and Fisheries 2011). Canola grown in systematic crop rotation helps to manage weeds more efficiently, but is susceptible and sensitive to particular herbicides and soil residual herbicides. Under dry seasonal conditions, or in alkaline soils, residues from herbicides previously applied to other crops can persist into the next canola season, thus affecting the canola plant (GRDC 2009). As canola is a broadleaf crop, farmers have more options for weed control in comparison to cereal crops such as wheat and barley (Victorian Government Department of Environment and Primary Industries 2012a). There are canola varieties tolerant or resistant to different herbicides, and these are usually chosen.

From paddock to plate: Australia’s export grain supply chain: storage, handling and shipping Following the grain harvest, a set of highly regulated processes comprise the supply chain of grain handling, storage, road or rail transport and shipping, if for export. The primary grains exported from Australia are wheat, barley, and oilseeds. Ancillary services are required before transport and storage of the grain. Testing for quality is undertaken on delivery to retrieval centres. Various characteristics are examined; for example, protein and moisture content and screenings for pests. The local storage and handling systems must be capable of accepting the total crop within the harvest period. Farmers will normally have on-site storage, as it provides a buffer capacity if their grains cannot be immediately accepted at the local silos. On-farm storage is also used as an alternative to the bulk handling system when, for example, a grain is destined for sale in the domestic market. Australia has 54 Mt of bulk grain storage across 623 sites, which is enough to store one and a half years of the average national grain production. Bulk handling companies provide a network of storage facilities and connections to seaboard grain export terminals, via road and rail services. Seventy-five per cent of Australia’s exported grain is transported by rail, with the remainder being delivered by road. Supply chains in Western Australia and South Australia are structured to deliver grain to a port facility, as 85 to 95% of the grain produced in those states is exported. In eastern Australia, around 50% of grain is used locally, and thus different transport arrangements are required. There are three major bulk handlers within Australia who handle and store over 80% of Australia’s grain crop: GrainCorp in New South Wales, Queensland and Victoria; Viterra (previously known as ABB Grain) in South Australia; and Co-operative Bulk Handling (CBH) in Western Australia. A key characteristic of the Australian export market is its ability to export grain between December and May. This is a time where there is high demand for grains in the Asian markets, and the supply from competitors in the northern hemisphere has usually diminished.

An Australian advantage Australia has a competitive shipping advantage in sending grains to south-east Asia, in particular to Indonesia, Malaysia, Thailand and Vietnam. From Western Australia the

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shipping transit time is 6.5 days, and 13.5 days from New South Wales. These times equate to about one-quarter to one-third of the transit time to Indonesia from ports in the United States, Canada or the Ukraine (AEGIC 2014). A matter that is relevant in expanding cereal farming is the farms’ location in respect of grain processing and port facilities. Supply chain costs make up 30% of the producers’ production costs. Thus when considering the location for potential expansion of cropping land in Australia, it is important to factor in the total distance of the supply chain from the farm to the final shipping terminal/port. If possible the goal is not only to reduce costs for the farmer, but also food miles from the farmer’s paddock to the consumer’s plate. Using wheat grown in Queensland as an example, travelling 200 km from farm to port starts at $60–75 per tonne and accounts for 30% of the farmer’s total annual cost of production (AEGIC 2014). A case study was conducted by AEGIC, comparing wheat supply chain costs between the Australian states. The post-farm-gate costs per tonne of wheat were $58, $69, $73, $70 and $72 for Western Australia, New South Wales, Queensland, Victoria and South Australia respectively.

Sustaining a future in the grains industry The major challenge for Australian grain farmers is to continue to improve yields or, more importantly, productivity by obtaining the same or greater yields with fewer inputs (such as fertilisers and water). This is the so-called ‘win–win’ solution: greater profits for farmers and less stress on the environment. Where farmers can lag is by assuming they are already at a maximum yield or that yields have plateaued. This is not necessarily the case. Reduction in the use of water and the elimination of externalities, particularly those causing environmental harm, are pertinent. Australian grain farmers will continue to deal with climate variability and this could become a much more significant problem if climate change leads to unforeseeable and radically changed conditions in the major growing areas. Grain is currently an important source of calories for over one billion people in the world, and its production needs to increase to support the growing global population. Where beef and expensive seafood provide opportunities for Australian farmers targeting the rapidly growing middle class in China and some other parts of Asia, most of the world’s population will remain dependent on grains for a considerable time yet. If Australian grain producers can remain competitive in the global market, they won’t be the poor cousins to beef farmers, or anyone else for that matter. Noodles, pasta, bread and a wide range of daily products are produced from wheat. There is no indication that this is going to change or that bread, noodles and other wheat products will no longer be dietary staples.

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Our Andy’s gone with cattle now T. Hundloe

Our Andy’s gone to battle now ’Gainst Drought, the red marauder; Our Andy’s gone with cattle now Across the Queensland border.

Henry Lawson, ‘Andy’s Gone with Cattle’

Introduction Nothing epitomises Australia’s prime position as a producer of high value, strong-demand farmed product than the fact the country ranks third in the world as an exporter of beef. Only Brazil and India are in front. There is very little difference in export quantities between India and Australia, and Australia was second to Brazil until very recently. In terms of cattle numbers three countries trump Australia: India, Brazil and China. In terms of beef production, Australia is seventh in the world. The United States, Brazil, the European Union, China, India and Argentina are ahead. Where Australia jumps up the list is in having a relatively small human population, and even though we are among the highest in terms of beef consumption we have considerable surplus beef to export. In 2013–14, Australia exported 70% of its beef and veal. Australia exports a wide range of beef products: frozen meat, high-priced products such as wagyu and other grain-fed meats, certified organic beef, and hamburger meat. Australia’s mixture of different grazing country and its value-adding chain, from extensive grazing to feedlot finishing, allows it to participate in all the beef markets. Reliability of supply, while not guaranteed, is very sound. Because Australian cattle producers have had to contend with droughts from the time the industry started, they have learned to deal with them. For example, drought conditions in certain parts of the country are dealt with by moving massive herds of cattle from the drought-stricken properties to better pastures or to the large number of feedlots scattered around the continent. Those who can afford it – the large pastoral companies – have cattle properties in different parts of Australia to allow for the movement of herds. Moving cattle in response to drought has been fundamental to grazing in Australia from the early days. Today massive trucks undertake the task, as the era of the drover on his horse with his hardworking dog 167

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alongside is well past, with the occasional exception. As movement by truck is very much quicker, fewer cattle are lost. The large companies may have a variety of beef properties, divided into breeding properties, generally in reliable rainfall districts; growing properties, widespread; background properties in very good rainfall areas where cattle can improve in condition; and feedlots where the ‘finishing touches’ are put on the beasts. As a general rule, Australian beef cattle spend 85–90% of their lives on extensive, unimproved pastures. If they enter a feedlot their stay is likely to be 2–4 months. At any point in time in the order of 2% of Australia’s beef cattle are in feedlots, where they are fed barley, wheat and sorghum. Australian beef producers have built a very good reputation for high quality, diseasefree meat, enforced by stringent government regulations on feedlot and abattoir procedures. This has made exporting easy in world where consumers are increasingly concerned about product quality and demanding assurances of a ‘clean and green’ product. Traceably, the ability to ascertain the origin of cattle (commencing on the farm) through the whole supply chain, is a feature of the Australian industry. No market is going to be more important than the Chinese one if the pundits and their modelling are pointing in the right direction. Attempting to estimate the future demand by the Chinese for meat in general, but beef in particular, has become an industry in its own right. Some fantastic numbers get mentioned. Fantastic is the appropriate adjective in this case. The one certainty is expect an increase in demand for beef by Chinese middleclass consumers. At present, the Chinese are still very keen on pork and chicken. These are animals that over millennia have been raised in villages, fed on scraps from human meals, and otherwise survive by scavenging food. Traditional rural communities relied on these animals for a source of protein. However, traditional rural China is rapidly disappearing. China is going through dramatic, whole-scale industrialisation and urbanisation. One cannot migrate to any of the modern industrialised Chinese cities and retain the benefit of eating your hens’ eggs or pork from the family pig. In the cities one eats at home or at food stalls. The products will have been sourced from around the world. The ‘new’, the ‘different’, the ‘exotic’, such as Australian meats, will entice those who have recently joined the Chinese middle class. This is where beef enters into Chinese diets. Beef did a similar thing in past decades in Japan and Korea as these countries industrialised and urbanised. The average per capita beef consumption in China at present is in the order of 4–5 kg per year. In Australia, and more generally in industrialised countries, it is in the order of 31 kg per year. If the Chinese were to adopt the diet of an industrialised country, their consumption could increase six to eight times. There are predictions of much greater increase; there is a forecast that Chinese demand for meat (obviously, including beef) will increase 50-fold between 2007 and 2050 (Linehan et al. 2012). If all Chinese were middle class by 2050, a 20–30-fold increase would be a relatively safe bet. Putting aside such fantastic forecasts, it is on the cards that Australia will be targeted to double its export of beef to China. We shall come to the practicality of meeting this target.

Australian beef exports The export of Australian beef has fluctuated in recent years. For example, there was a significant decrease in live exports to Indonesia after an Australian national television program showed maltreatment of cattle in an Indonesian slaughterhouse and the Australian Government banned exports. In other circumstances, outbreaks of bovine spongiform

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encephalopathy (BSE, or ‘mad cow disease’) in major competing export markets such as the United States and Brazil have benefited the Australian exporters. And we cannot ever escape the influence of currency movements. The value of the Australian dollar vis-à-vis other currencies plays an important role in export competitiveness. These factors plus climatic conditions in competing exporting countries result in a minor rollercoaster for the Australian beef industry. That stated, its prospects are extremely good given the expected increase in world demand for beef. Yet, as we will discuss below, not all is rosy. There are serious off-farm matters related to beef farming in certain locations. A major beef-producing area of Australia happens to be in river catchments draining into the Great Barrier Reef. Two adjacent catchments, the Burdekin and the Fitzroy, are major beef production regions. The Reef, a UNESCO World Heritage Area, is Australia’s iconic natural feature and top tourist drawcard. Its near-shore corals have been dying for some time now, and the scientific evidence points to agricultural run-off (fine sediment, artificial fertilisers and a variety of pesticides) as a significant part of the cause. This issue is dealt with under a separate heading below.

The dollar value of beef exports The most recent export data show that beef products outcompete wheat as Australia’s most important export earner. Wheat was ahead now it is beef. Next year? At the time of writing, beef cattle numbers are in the order of 28.5 million cattle, and sheep at 75.5 million. If dairy cattle are included, cattle numbers are in the order of 30 ­million. There has been a recent expansion of cattle numbers due to the relative financial returns of beef compared to wool. Few, if any, would have predicted this in the mid20th century when Australia ‘rode on the sheep’s back’: just before the serious decline in wool prices from 1971, there were 180 million sheep in Australia. Of the 28.5 million beef cattle, ~12.6 million are in Queensland, 5.7 million in New South Wales, 4 million in Victoria, 2.2 million in the Northern Territory, 2.1 million in Western Australia, 1.3 million in South Australia and 0.7 million in Tasmania (rounding error exists). The largest cattle area in the nation is the Fitzroy Basin, with the ‘beef capital’ of Rockhampton the commercial centre. Near to 77 000 cattle properties are responsible for the national herd. As discussed below, some are enormous properties by world standards; others not much more than hobby farms.

The cattle land Today, much of Australia’s land mass is given over to the grazing of cattle, over 200 million ha. Given the fact that it is not unusual to have cattle and sheep run on the same property, it is difficult to be precise as to how much of the nation is cattle land and how much is sheep land. Mindful of that, one estimate is that 140 million ha is sheep land, resulting in a total of 340 million ha as grazing land. There is considerable ‘mixed’ farming land with cattle and crops (or wheat and sheep) and this makes for another set of difficulties in presenting precise figures. West of the Great Dividing Range, the Australian savannah can be a seemingly endless, flat-as-a-pancake plain; it can be a mosaic of scrubby trees and short grass struggling for their share of soil nutrition; it can be marked by mini-pyramids, home to cities of ants (see Fig. 13.1). When the Mitchell grass is tall and so are the ant hills, this is weird and yet

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a

b

c

d

Fig. 13.1.  Australia’s savannah landscapes. (a) Endless Mitchell grass. (b) Snappy gum and cattle feed. (c) Small ant hills dotting savannah country. (d) Overgrazing. Source: Ludwig and Courtenay (2008). Photographs by John Courtney

peaceful country, unknown to the city clerk. Some see beauty in this landscape. Add a reasonable number of grazing cattle and little damage is done. Add too many, overgraze, and the result is the vivid contrast depicted in Fig. 13.1d. We should be smart enough to not do that. Respectable profits can be made from extensive grazing land if the number of stock are adjusted in line with drought and rain. Most of the beef land could be designated as ‘free range’; that is, the cattle are not the lot-fed beasts that we associate with the United States and increasingly Brazil. Australia does have its feedlots but most are tiny by US standards and their role does not dominate the industry. Much of Australian cattle country is near-natural pastoral land. The use of ‘near-natural’ is deliberate. No hoofed animal trod on Australian soil until the Europeans came in the late 18th century, and the tramping of cattle, sheep and, in specific cases, camels has altered the environment. The burning of vegetation by Indigenous Australians also had an impact. What is clearly not near-natural is what are commonly called improved pastures, otherwise modified paddocks. These are areas where higher-yielding grasses are sown and fertilised. The modification of pastures is a source of the off-farm externalities. The Bureau of Resource Sciences (as it was in 2001, to become the Bureau of Rural Sciences before being made part of ABARES) produced a map showing the extent of modified pasture in Australia: see Fig. 13.2, reproduced by FAO. The most heavily modified pastures are concentrated in Victoria. On either side of the Victorian–NSW border the improved pastures are bolstered by irrigation. This is dairy-farming country as much as anything else. There is a considerable area of improved pasture in New South Wales, extending over the eastern half of the state. The bottom south-west of Western Australia plus the coastal country as far north as Carnarvon ranges from heavily to lightly modified grazing land.

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Fig. 13.2.  The area in which modified pasture exists. Source: Bureau of Rural Sciences.

The river catchments that flow east to the Great Barrier Reef (in aggregate they are the Reef catchment) are subject to the introduction of non-native grasses and being fertilised. However, the extent of this modification is light. As there are a growing number of organic beef farms in these catchments, the overall picture is not clear. However, the spatial extent of modification, from north of Cairns to the south of the Reef, indicates the potential for fertiliser run-off to be a problem for near-shore corals. Soil erosion on the cattle properties is the other source of damage to the Reef. These matters are discussed in more detail below. Figure 13.3 shows part of a small herd of organic beef cattle in the Fitzroy Basin. This is the major beef cattle region in Australia. It is adjacent to the Great Barrier Reef.

Size matters The bulk of the beef country is in Queensland as noted above, although the largest cattle property in the world, Anna Creek on the west of Lake Eyre, is in South Australia. It is 23 677 km2. It initially ran sheep. However, with an average of 125 mm of rain per year, the very best of the property carried 13 sheep per square kilometre, and it carries far fewer of the much larger cattle. Figure 13.4 illustrates that there are reasonably high numbers of cattle spread around Australia. As an illustration of how important beef farming is to the nation, ~56% of its land mass comprises beef-cum-sheep grazing properties. We can reiterate here that sheep grazing dominated cattle grazing until recent decades. Changes in relative prices for wool and beef brought a significant shift from one to the other. This is an excellent example of what we would consider ‘economic sustainability’. In other words, the two types of farming were substitutable at virtually no cost and changed in accordance with prices (shifts in demand).

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Fig. 13.3.  Organic cattle in the Springsure area, Fitzroy Basin.

Doubling beef production to meet radically increased demand from China will only be feasible if even much more sheep land is converted to beef grazing. It is not as straightforward as this. If wool, lamb and mutton prices increase due to a shift in demand for them, farmers will need to research the best deal. What is being discussed is the ‘cross-elasticity

National cattle numbers as at June 2013 29.3 million head

WA 2.0 million

NT 2.2 million Queensland 12.8 million SA 1.3 million NSW 6.0 million Victoria 4.2 million Tasmania 0.8 million

Source: ABS (final 2013) Fig. 13.4.  Cattle numbers by state. Source: Meat and Livestock Australia.

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of supply’: if there is a 10% increase in the price of beef, what percentage change is there for the supply of lamb? If the price of both go up, it is possible that there will be no change in the conversion of grazing land and both beef and lamb producers will earn more. The only other possibility of meeting a significantly increased demand for beef would be to engage in massive development of feedlots, but that would require a concomitant expansion of grain growing for cattle feed; that in turn is likely to require numerous large irrigation schemes unless more areas of moisture-holding soils are found. The cost–benefit analysis would be very interesting. We will struggle to find the optimal economic and environmental solution to meeting an increase in demand for beef. The struggle would be the mirror image of meeting an increase in wool and lamb production. The likelihood is that Australian pastoralists will be faced with an increased demand for both beef and sheep products (meat and wool), a rather enviable position to be in. If an increase in global demand cannot be met by an increase in global supply, prices will increase and graziers will rejoice. But in an ever-changing dynamic global economy there will be a reaction to the increased prices and the search for a new equilibrium. Today, near half of Australia’s farms are primarily beef farms. Not all are totally devoted to beef. There are mixed beef–sheep farms. There are smallish farms that run cattle but also grow crops. On the other hand, there are enormous beef farms where the only other animals are wild. The 28.5 million beef herd is grazed on ~77 000 farms. The simple mathematics is that this means on average 340 beasts per farm. Averages, particularly in Australia’s beef industry, are very misleading. There is a large number of very small farms (we could rightly call them ‘hobby farms’, not serious income-earning operations), a reasonable number of small farms running in the order 100 head, a significant number of mediumsized farms – and then there are the enormous pastoral properties. The following examples illustrate. Lake Nash station, in the Northern Territory but sitting on the border with Queensland, is just under 17 000 km2. On it run 55 000 head of cattle. Clearly, the number of beasts per hectare correlates with vegetation and rainfall, not much of the former, except in the occasional very good wet season. To the north-west is another famous Australian cattle property, Brunette Downs. It is a mere 12 000 km2. It is the largest perpetual lease in the Northern Territory. Much of Australia’s pastoral land is owned by the government but leased to farmers. In very good seasons, meaning good rains, the property can carry in the order of 70 000 head. There are 180 artesian bores on the station, spaced 10 km apart. Where rainfall is seriously lacking, the saviour (if there is to be one) is water ‘from the devil deeper down’, to quote Banjo Paterson. Then there is Alexandria station, once the largest cattle station in the world. Today it is a mere 16 000 km2. It has had the same owner for nearly 133 years. The property sits just below Brunette Downs and extends east to the Queensland border. It can run 60 000 head. Victoria Downs, in years gone by described as ‘the Big Run’ (McHugh 2012, p. 109), was 41 155 km2 in 1882 but is under 3000 km2 today. There is a fascinating story attached to this property. In 1839, the HMAS Beagle sailed into Joseph Bonaparte Gulf on the western tip of what was to become the Northern Territory. Except for those who deliberately turn a blind eye to evolution or have had zero schooling, all know of this ship’s most famous passenger, Charles Darwin. Once in this gulf, the ship sailed into a large inlet. It was of the Victoria River, named after the British monarch of the period. Not until an expedition on land in 1855, led by a surveyor named Augustus Gregory, was the extent of the river discovered. The explorers found vast expanses of well-watered pasture. Gregory and his team had walked on land that would, as Evan McHugh writes (2012, p.110), ‘become the greatest cattle station the world has ever known’. In 1882, after financial failures by previous .

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owners, the wool-broking firm Goldsbrough Mort took over Victoria Downs. It was considered at the time that the station could run 100 000 cattle and 40 000 sheep. An experiment in running sheep proved unsuccessful, probably due to the cost of transporting the clip. Not long after, in 1892, Goldsbrough Mort, with an annual government subsidy, had a vessel built and commenced exporting cattle to Asia. This export industry is obviously far from new. The vessel was appropriately christened Darwin and its home port was the town of Darwin. In 1890, a consortium of new owners, with Sidney Kidman as one of the partners, took over Victoria Downs. Kidman was dubbed Australia’s ‘Cattle King’ as he was for a time the world’s largest land-owner. In more recent times, during the Second World War, the station and others in the ‘top end’ of Australia were to benefit by a wartime policy of, if necessary under invasion, leaving the north ‘scorched’. To depart in a hurry and to ensure no food was left for the invaders (the cattle were to be taken south), good quality roads were required. Large bulldozers were put into action to form an escape stock route to the south, with watering holes provided. An invading army would find no food, little water and, its commanders might conclude, a land not worth the effort. The downside is that they would have roads leading south. Another famous cattle station, Wave Hill, abuts Victoria Downs to the south. Its fame, or infamy, comes about from an unsuccessful attempt in 1966 by the traditional owners of the land, the Gurindji people, to negotiate pay equal to that of the white stockmen. In 1966, pastoral workers were awarded equal pay regardless of race. The pastoralists were not happy. They had had good stockmen at minimal cost and had no desire to change that situation. Previously all sorts of discriminatory deals had been done with the Indigenous workers due to their lack of industrial muscle. When the property owners decided to disregard the new industrial ruling the unions stepped in, and author Frank Hardy joined the fight by publicising the situation. When negotiations failed, the Gurindji workers went on strike by simply walking off the station. This was to be the genesis of the land rights movement in Australia. Another large cattle station is the property Adria Downs, just west of the well-known Queensland town of Birdsville and stretching into South Australia. Adria Downs is smack bang, as they say out that way, in the ‘Channel Country’. Three major river systems converge, and in a good wet they combine into a massive inland lake then flow into Lake Eyre. They are the Cooper River, the Diamantina River and the Georgina–Eyre Creek. Here is an accurate description of this country: The country lies dormant for years on end, exploding into abundance when the waters finally come. A great pulse of life – vegetation, aquatic life, birds – rolls through the country like a second wave, following the raging waters … the floods roll down country that is mostly flat. The black soil floodplains are many kilometres wide, allowing water to spread thousands of square kilometres. The growth that occurs afterwards is miraculous. A dazzling array of plant species springs up – an estimated 250 varieties of grasses and herbage with extraordinary capacity for putting condition on stock. (McHugh 2012, pp. 186–7).

Thylungra, also in the Channel Country, encompasses a variety of ecosystems. Soils are ‘natural’ (unfertilised) and the beef produced is certified organic. In the north of Thylungra mulga grows; in the south there are large gidgee stands in among sand hills; there are

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also black soils in parts of the south. The remainder of Thylungra is best described as ‘stony range’ country. This variety of ecosystems permits growth of a wide range of shrublike trees: gidgee, mulga, coolabah, yarpunyah, bloodwood. The range of grass and herb species is just as wide: the much valued Mitchell grass, Flinders grass, blue grass, bluebush, button grass and, naturally enough, burr and ‘neverfail’ on the floodplains. The vagaries of nature have very significant impacts on the Australian beef industry. The reason to select Adria Downs for special mention is that it is certified organic and sells its beef under the Organic Beef Exporters logo. Other stations in the Channel Country are following suit. Is this the future of Australian beef? We have vast areas of semi-arid and savannah grazing land. Don’t overstock and the results are good. This is the counter to the vast feedlot ‘farms’ in the United States. No fertilisers are applied to this remote Australian land. No growth hormones are given to the cattle. All it will take is enough consumers to say no to the artificial, and organic beef will be a major Australian export. At present Australia could assert its position as world leader in organic beef and sheep production. The only downside is that this, if successful, would marginalise the other beef and sheep producers. They could convert to organic.

In more detail The average beef farm income in recent years has been around $100  000 per year. The larger properties earned vastly greater sums. Still dealing with averages, the value of each animal has been between $900 and $1000. Again averages hide more than they illustrate, as there are significant different beef products and farmers have a choice of selling animals at different stages in their life and consequently obtaining significantly different prices for their herd. Australia’s beef cattle industry is based on three main breed types. The British Bos taurus breeds are preferred in the temperate climates, the others (derived from Bos indicus and Bos taurus africanus subspecies) are grazed in subtropical and tropical regions. Bos indicus are preferred in the northern parts of Australia due to their tick resistance, tolerance of heat and general hardiness. These are cattle that free-roam on native grasses and if not sent to feedlots to put on condition produce meats that suit the American hamburger market. In the temperate area the dominant breed is Angus. It has replaced the Hereford as the major breed in Australia. The dominant breed in the tropics is the Brahman. The main European breed is the Charolais, having overtaken the Limousin breed. Considerable cross-breeding has long been a feature of the Australian beef industry. The small number of breeds mentioned obscures the fact that there are in the order of 40 breeds registered with Australian cattle breeder societies.

Beef and veal consumption in Australia and overseas There have been quite notable changes in the average Australian’s meat diet since 1970. From 1970 to 2010 there has been a 41% decrease in red meat consumption (beef, veal, mutton and lamb). On the other hand, poultry consumption has increased 400% in the same period, pig meat by 90%. While this has been happening demand for red meat has been increasing in China and some other smaller foreign markets, and this has more than compensated for the decrease in Australian consumption.

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Australia’s prime source of agricultural data (it does provide other things) is the Australian Bureau of Agricultural and Resource Economics and Sciences. In March 2012, at its annual ‘Outlook’ conference in Canberra, a team of its staff published a paper titled ‘Future Demand to 2050: Opportunities for Australian Agriculture’. We have discussed the expected big winners previously (beef, wheat, dairy products, sheep meat and sugar), but here we will concentrate on beef. Here are the ‘headline statistics’, as they say in the media. By 2050, on a global scale demand for meat will more than double on the base year of 2007. In the case of China, its import of meat is forecast to rise from US$2.9 billion in 2007 to US$149 billion in 2050. In approximate terms that is a 50-fold increase. By 2050, Australia’s production of beef is expected to nearly double and its exports to China grow from about US$1 billion to about US$27 billion. Can we believe these numbers? The answer is a qualified ‘yes’, in as much as they are the result of reasonably robust modelling. What drives up the price is simply demand outstripping global supply, but it is not that simple. At a certain price for beef, the world’s middle class will substitute other meats (for example, lamb if less expensive) and hence dampen the increase in the price of beef. However, we can expect the price for all meats to increase substantially in face of the dramatic increases in demand following income growth, in particular in China. Of course, some meats will be impacted more than others. We can expect some red meat to be replaced by white meat (chicken, pork and fish). Notwithstanding the ‘cross-elasticity of demand’ – the ability and willingness to substitute other meats – a much enlarged global middle class will result in an increase in price of all relatively expensive foods, and that means all meats. If consumers wish to maintain their level of meat consumption, other goods and services will find fewer customers. An increase of that magnitude in Australian beef production is not going to be possible in quantity terms, much as Australian beef farmers would wish it to be. Obviously, real price increases for beef leading up to 2050 must account for much of this increase in value. As looking forward that far is a daunting task and economists have not yet made realistic estimates of demand elasticities over anything but the short-term, we need to understand the assumptions behind the models. Although other major beef producers – Brazil, Argentina, the United States and possibly others – will also be playing their part in attempting to meet the dramatically increased global market, my educated ‘guesstimate’ is that aggregate supply will fall far short of demand, and, consequently, all beef producers will earn more per kilogram. This won’t only apply to beef, as all meats should experience significant price increases in response to the increased demand. How could Australia double its beef production? It would be feasible to achieve this, all other things being equal, by taking much land out of wool production and running cattle instead of sheep on this country. Otherwise, we are looking for rather dramatic increases in yields. These could be achieved by a massive increase in feedlots and the production of fodder. The latter means more land under cultivation, or an unexpected increase in grain output per hectare. The latter does not seem realistic as Australia has a very small yield gap to fill. This leaves as a solution devoting more land to growing crops to feed cattle. This could be managed, but at what opportunity cost? What gives way? Less grain for direct human consumption? If not this, the cultivation of natural land. Where? What amount of irrigation would be required and at what cost? Will the higher price of beef justify the expenditure of building large new dams?

13 – Our Andy’s gone with cattle now

Making the most of what we have When we turn our eye to the extensive savannahs, semi-arid and arid land that makes up most of Australia, there can be little or no scope to increase the number of beasts per hectare. This is rain-fed and bore-fed country. Droughts and floods are what we have to expect and live with. The best strategy is to manage herd or flock sizes and move animals to greener pastures, great distances if necessary, to counter region-specific drought. It is unusual but not unknown for all of the nation’s grazing country to be drought-affected at one time, and graziers now have the ability to shift stock quickly by road-train, rather than spending months on stock routes (which might have been eaten out). If a pastoral enterprise has multiple properties (as some did and still do), moving animals around can be much easier. We need to become much better at forecasting droughts – in reality the probability of droughts – and adjusting herd sizes in advance. We have excellent historical rainfall records for some pastoral stations. For example, rainfall records at Mt Morris, north-west of Charleville, go back to 1866. Applying simple mathematics, we can derive probabilities of droughts occurring (for example, one-in-seven years) and adopt risk-adverse strategies. The long drought between 1895 and 1904 is cemented in memories of those who know the Australian outback. Anna Creek ran sheep in the period of that 10-year drought. Its flock was reduced from 50 000 to 11 000 notwithstanding the purchase of large quantities of hay. Many more droughts, some just as devastating as this one, have occurred since. Yet, time and time again we get caught holding too many stock as the drought approaches and deepens. Psychologists are likely to suggest this is due to the fact that most of us are optimists – it will surely rain soon. Before we start to feel that it is possible to make decisions on the basis of probabilities, before we become confident that we are capable of dealing with vagaries of nature, let us hear once again from Henry Lawson: And the ‘rise and fall of seasons’ suits the rise and fall of rhyme. But we know that western seasons do not run on scheduled time; For the drought will go on drying while there’s anything to dry, Then it rains until you’d fancy it would bleed the sunny sky. Henry Lawson, ‘The City Bushman’

Where to now? As noted previously, at a farm scale we can find surprisingly good quality soils and grasses where not expected. This applies in parts of the semi-arid inland as much as in more fertile country. The sheep property Thylungra, west of Charleville, was developed in the late 1800s because it had a permanent water-hole, although much of the surrounding country had little appeal. The station is situated on Kyabra Creek, a tributary of Cooper Creek. New, ongoing research into stocking rates and livestock food needs should help improve the quality and quantity of meat produced and, hence, farm profits. This type of research points to the fact that managing stocking rates – with a very keen eye on long-range weather forecasts, in particular the ENSO or El Niño–La Niña cycle – is only part of modern management of beef properties.

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Feedlots play their role in modern beef stock management. So do chaff providers. The last thing a grazier wants is de-stock by sending cattle or sheep to the sales yards when other graziers are doing the same thing. When this is the case there tends to be both poor quality meat and an oversupply. Prices are depressed. We conclude this chapter posing questions. Should Australian beef farmers relax and wait for the expected boom times as suggested by the rise in demand in China? Is ‘go organic’ the smart strategy? As always, there are other options.

14

Horticulture J. Chiomey

Introduction With a range of climates, large land mass and adequate amounts of natural capital (otherwise land and all that goes with it), Australia boasts a sizeable, very productive, very diverse horticultural industry. The industry is widespread ranging across the country, although the coastal regions dominate. Most of the produce is grown by small-scale family farms. However, there is a growing trend towards an increase in scale from small to medium and large-scale operations. The small market-gardens, orchards and fruit plantations on the outskirts of cities and towns have largely given way to residential development. Today, Australia’s horticultural industry is the third largest agricultural industry in the country. It provides considerable work for both itinerant Australian workers (called ‘fruit-pickers’ if working the fruit seasons) and international visitors, mainly young backpackers. It is an industry in which the farmed produce is highly susceptible to disease, natural disasters such has hailstorms and cyclones, and predation by feral animals (such as wild pigs) and native ones, including flying foxes. The industry suffers, in certain locations, from the perception or reality of doing damage to natural ecosystems. Run-off of chemicals into the waters of the Great Barrier Reef is the prime example, and salinity from inappropriate irrigation in the Murray–Goulbourn region of Victoria is another case. The industry has the capacity to change and become more sustainable, while still ­producing high yields and economic benefits for farmers and investors. Management practices focusing on sustainable farming innovations and new technologies are a focus of this chapter.

Horticulture’s role in the Australian economy Horticulture is Australia’s third-largest agricultural industry in terms of gross value of production. It comprises both annual and perennial crops, approximately of equal value. The major growing areas are listed in Table 14.1. Irrigation is important for several of the crops. Large irrigated areas not mentioned in the table are the Ord River scheme, the Burdekin River scheme and Bundaberg Irrigation scheme. And there are smaller irrigation schemes such as the one on the Atherton Tableland. There is the Fairbairn Dam which led 179

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Table 14.1.  Major horticulture growing areas State/Territory

Region

Victoria

Goulburn Valley (not to be confused with the NSW city)

New South Wales

Murrumbidgee Irrigation Area

New South Wales–Victoria

Sunraysia district

New South Wales– Queensland

Coastal strip east of the Great Dividing Range

South Australia

Riverland district

Tasmania

Northern and around Hobart

Western Australia

South-west

Northern Territory

In proximity to Darwin

to the conversion of sheep and cattle country to crop cultivation in central Queensland. Throughout Australia, horticulturists, when not reliant on either rain-fed production or water from the large dams, have their own farm dams, and where underground water is available bores to suck water from aquifers. Queensland, as a very large state with a variety of climates, has a prime role in horticulture. The following crops are concentrated in Queensland: bananas, pineapples, mangoes, mandarins, avocados, tomatoes, capsicum, zucchini, beetroot and macadamias. It is not without reason that there is a song about a royal visitor to Queensland that is titled ‘Pineapple Princess’, and that Queenslanders are either ‘banana benders’ or ‘mango munchers’. In New South Wales, Victoria and South Australia, the major products are stone fruits, oranges and grapes. Potatoes for the purpose of processing are grown in Tasmania. As the ‘Apple Isle’, Tasmanian apples cannot go unrecognised, nor can its wine grapes. Tomatoes for processing are grown in Victoria, as are a variety of fruits for canning. There is a major cannery in Shepparton. Pears are mainly grown in Victoria, apples in all states, as are vegetables. Early season mangoes come from the Northern Territory. What once would have been considered exotic fruits (such as lychees, papaya, jackfruit, tamarillos, mangosteens, durians, rambutans and longans) are mainly grown in coastal, tropical north Queensland. Left out of the above listing is the fruit Australians used to consider an end-of-year, or Christmas, treat – cherries. In recent years the cherry ‘season’ has become two seasons, with imported US cherries sold during the Australian autumn and winter, at far higher prices than one would normally pay for the local product. In the Australian autumn of 2015 (North American spring), cherries imported from the United States retailed at $40/ kg. During the peak of the Australian growing season of that same year, prices fell to $10/ kg. This is an example of rich consumers willing to expand their diet by eliminating seasonal influences. This has become a feature of the globalised food market. Tasmania’s cherry growers are benefiting from a similar propensity to seek out the previously unavailable markets. Their cherries are in demand in China. Why particularly Tasmanian cherries? The absence of fruit fly. About 30% of Australian cherries are exported, with Asian importers taking ~80%. The major fruits that are exported from Australia are table grapes, cherries, citrus fruits, avocados, apples, pears, lychees, and so-called ‘summer fruit’. Table grapes are the big seller. The value of table grapes exported in 2013 was $200 million for 70 000 tonnes; fresh grapes can be unloaded in the key Asian markets of Hong Kong, Vietnam, Indonesia, Singapore, Malaysia and Thailand in 14 days. High-value products can be flown in over-

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night. Other than the grapes, most other fruits are exported in small quantities at present. Australia imports small quantities of apples from China and New Zealand, while pears are imported from China and Korea. Lemons and grapes are imported from the United States, avocados from New Zealand, and very small quantities of mangoes from Mexico and lychees from south-east Asia. Not that long ago, papayas came into the country from Fiji – now they are grown every month of the year in Australia. A variety of issues need to be resolved before significant expansion of fruit exports occurs. There is the threat of fruit-fly-infested fruits being exported from mainland Australia. New Zealand importers are very sensitive to this matter. As we were researching this book there was a report of fruit flies (or was it only one male fly?) discovered in New Zealand. At about the same time, in the major banana fields around Tully so-called ‘Panama disease’ closed down one farm, with the surrounding farmers extremely nervous. On occasion, Australian citrus farms have lost all their trees, and taken years to recover, due to the disease known as ‘canker’. While fruit and vegetable diseases and pest outbreaks are uncommon in Australia, when they occur they are likely to receive more attention than they would in countries where such are common. We get the bad publicity. Action to deal with the problem is swift and no excuses are tolerated. Australian growers face other obstacles in expanding their exports. There is the issue of blemished fruit, as high-income foreign consumers are just as finicky as domestic consumers. Very significant waste results due to the rejection of otherwise good-quality fruit and vegetables. There is, for some products at least, the lack of scale economies. We don’t grow enough for our prices to be low overseas. Add to that, average yields produced in our deciduous fruit orchards are lower than in the top overseas orchards because our soils are generally hard with low porosity. In 2011–12, the gross value of Australia’s horticulture was over $8.5 billion, with over $4 billion coming from fruit and nut production, $3.3 billion from vegetables and over $1.2 million from nursery production (Queensland Government Department of Agriculture and Fisheries 2013). Much of this produce is sold in the domestic market, ending up on the shelves of the major retailers such as Woolworths and Coles, yet at ~17% of total production, the export market is significant. With Australia’s close proximity to Asia, and the fact that Australia is seen as an attractive destination for foreign investment because of the low level of sovereign risk, a trading relationship with Asia, especially China, is set to become mutually beneficial. Export figures in recent years have been relatively high, with around $1.2 billion worth of fruit, vegetables, dried fruits and nuts being sold overseas. On the other hand, Australia’s imports, consisting of out-of-season fresh produce, plus considerable amounts of frozen and processed fruit and vegetable products, accounted for just over $2 billion in 2011–12. The fact that we import more dollars’ worth of horticultural produce than we export is due to substantial amounts of processed and frozen goods coming into the country. In early 2015, canned, processed tomatoes imported from Italy retailed at a dollar a can in Brisbane. Taking into account the actual amount of tomato in each can, the price to the consumer was $4/kg. Good quality fresh tomatoes were selling for twice this price in the same shop. Italian farmers were, we can assume, not paid a pittance, but possibly their workers were. Questions about ‘dumping’ (selling below cost) were being asked. With strong economic growth within the Asian region and per capita incomes steadily increasing, there is an emerging consumer market demanding safe, high quality food. Much of Australia’s horticultural trade with Asia is seasonally based, exporting what can’t be produced at that time of the year in Asia. This is most obvious with fruit seasonality.

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Table 14.2.  Australian horticulture seasonal guide to fruit Summer

Autumn

Winter

Spring

All year round

Blackberries Blueberries Cherries Grapes Melons Oranges Peaches Plums Raspberries Strawberries Mangoes Lychees

Apples Figs Grapes Kiwifruit Lemons Melons Pears Plums Quinces Custard apples Strawberries Blueberries

Grapefruit Kiwifruit Lemons Mandarins Oranges Figs Custard apples Strawberries Blueberries

Grapefruit Lemons Oranges Mangoes Mandarins

Bananas Pawpaws Papayas

Based on industry data.

Summer in Australia coincides with winter in Japan, China and Korea. Tables 14.2 and 14.3 provide a guide to the seasonal availability of fruit and vegetables in Australia. Some of these products are presently sold into northern hemisphere markets. Others have that potential. The vast range is impressive, and it is not complete.

Major horticultural areas in Australia Wherever there is sufficient rain or available irrigation and suitable soils (with or without fertiliser), fruits and vegetables are grown in Australia. The major areas are listed in Table 14.1. Within tropical and subtropical regions, bananas, avocados, citrus, macadamias and mangoes are major crops. Exotic fruits of Asian origin, such as rambutans, mangosteens Table 14.3.  Australian horticulture seasonal guide to vegetables Summer

Autumn

Winter

Spring

All year round

Asparagus Beans Beetroot Cabbage Carrots Celery Chillies Cucumbers Eggplant Leeks Lettuce Pumpkins Rhubarb Snow peas Spinach Spring onion Sweetcorn Tomatoes Turnips Zucchini

Asparagus Beans Beetroot Cabbage Carrots Cucumbers Eggplant Lettuce Potatoes Pumpkins Snow peas Spring onion Sweetcorn Tomatoes Turnips Zucchini

Brussels sprouts Carrots Fennel Potatoes Silverbeet Spinach Tomatoes

Artichokes Asparagus Beetroot Brussels sprouts Cabbage Fennel Leeks Rhubarb Silverbeet Spinach Tomatoes

Bean shoots Broccoli Cauliflower Mushrooms Tomatoes

Based on industry data.

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and durians, are becoming more readily available in tropical north Queensland. Temperate regions such as the Goulburn Valley, the Batlow and Orange areas, Stanthorpe in Queensland, the Donnybrook area of Western Australia and the Adelaide Hills area of South Australia, produce apples, pears, grapes, stone fruit and berries. The Granite Belt area around the town of Stanthorpe produces most of Queensland’s temperate fruits such as apples, nectarines and grapes, as well as temperate vegetables such as carrots, celery and mushrooms.

Tasmania – a special case Tasmania is a special case because it has all the biosecurity advantages that a small island provides. For a long time Tasmania was known as ‘the Apple Isle’ because of its large production and export of apples. Now it distinguishes itself as a fruit-fly-free part of Australia, allowed to export into countries otherwise hesitant to import certain products. For example, Tasmanian cherries are in high demand in China, with anecdotal evidence of Chinese buyers contracting to take the whole crop from selected farmers.

The Murray–Darling Basin The Murray–Darling Basin is the largest river network in Australia. Encompassing over 1 059 000 km2, the basin is twice as large as Germany and about one-seventh of the total area of Australia. Stretching across four states, it reaches from the semi-tropics of Queensland, throughout the New South Wales interior, into the Snowy Mountains of both New South Wales and Victoria, and ends its journey in South Australia. The Murray–Darling Basin is a dominant feature of Australian agriculture. It is commonly referred to as the country’s ‘food bowl’. In terms of area it is not as large as the vast outback cattle and sheep country (but it has its share of these two industries). It is the wide range of products grown, and many in very large quantities, that allow it to claim the epithet of food bowl. The Basin contains over 40% of Australia’s farms. The fact that in the order of threequarters of domestic, industrial and agricultural water supply within Australia emanates from the Basin is another indicator of its significance. It contributes one-third of all agricultural produce grown in Australia, and much of this is in the nature of horticulture. A fascinating entrepreneurial exercise in the late 1880s was the catalyst for what was to come in the Murray–Darling Basin.

A little history Developing the Murray River for irrigation started in the late stages of the 19th century, after Alfred Deakin, one of the founders of the Commonwealth of Australia, headed to America to seek the employment of the famous Canadian Chaffey brothers, George and William. The brothers were renowned for establishing very successful irrigation schemes in California. If turning near-desert into productive land was possible in the United States, why not turn the Mallee region of Victoria into the first major fruit-growing district in Australia? The Chaffey brothers were enticed to Australia. Once in the Mildura region the brothers noticed prime soils and the abundance of water in the nearby Murray River. Their approach to irrigation was basic, but their concept of promoting the newly irrigated blocks to would-be-settlers was pure Californian salesmanship, with its shortfalls. The irrigation involved constructing very large pumps

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to suck the water from the Murray River into the irrigation channels that would feed each farm block with water. The project was a technical success. In its early days it was an economic flop, American entrepreneurship notwithstanding. In the long term, irrigation managed to turn the Mildura region into a thriving fruit-growing area (Strudwick 2012). But at what cost?

Environmental flows Little consideration was given in the early years as to what effect major irrigation projects would have on the environment. Problems became evident when disease, pests and the first signs of salinisation were noticed. Salinity became, and still is, the greatest negative externality caused by irrigation in the Murray–Darling Basin. Salinity is the process of salty ground water being drawn up to the surface, where the salt remains after the water evaporates. This causes the surface to become dry and devoid of the nutrients that are essential to life within soil. The main cause of water and salt being drawn to the surface is waterlogging from irrigation and land clearing. It has to be recognised that in installing irrigation projects, waterlogging is an unwanted by-product. When the natural hydrological system is altered, both on-farm and off-farm unwanted events occur. Salinity is one such result. If off-farm, these results are what economists call externalities because the cost of lost productivity downstream is not borne by the irrigator but a third party, who could be another farmer. Most of the water fed into the Murray River comes from snow melting (snowmelt) in the Victorian and NSW highlands, and as of 1972 much of this water has been diverted and stored in dams to be used for irrigation. Dams, weirs, waterlogging irrigation trenches and insufficient rainfall in some years have all led to decreased water flows throughout the Murray River, causing not only loss of irrigation water , but also negative impacts to the health of the river system and the flora and fauna that it supports. The need to restore ecological flows has been long recognised and, while no longer neglected, arguments persist as to the success or otherwise of the efforts so far. In 2012, what is called the Basin Plan became law. Under it the environment is to get 3250 GL by 2019. In 2004, the environmental flow was only 500 GL (Dickson 2015). There is much hard policy work to be done if the significant increase called for is to be achieved. While the future of the Murray River remains uncertain, we should not overlook the pioneering irrigation work done by the Chaffey brothers so long ago. For better or worse, the Murray Irrigation Area might not have come about, or at least been different, without their initial efforts. Of course, what we have to deal with is what we witness today.

Wine growing regions of Australia Wine growing in Australia has a history about as rich as its finest shiraz or chardonnay. The first European settlers had ambitions of establishing grape growing in New South Wales, but were unable to adapt to Australia’s conditions, and their efforts frustrated by a lack of experienced viticulturists among them. An influx of European migrants in the late 19th century and growing in numbers through the 20th century changed that situation and led to the establishment of wine grapes in various regions of Australia, particularly where the climate was Mediterranean. Yet it wasn’t until after the Second World War, as even larger numbers of Europeans migrated to Australia and began demanding higher quality local wine, that the industry flourished. Improvements in all facets of wine production helped create the high standard of wine that Australia is now known for. Between 1990 and 2008, the vine-bearing area in Australia has nearly tripled from 61 000 ha to over

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165 000 ha and revenue increased from $180 million to just under $3 billion (Mounter et al. 2011). Australian wine exports go mainly to the United Kingdom, the United States, China and Canada. Most production occurs in the Lower Murray, the Limestone Coast of South Australia, Big Rivers of New South Wales, and north-west Victoria. The Margaret River area of south-west Western Australia, Tasmania and the Stanthorpe region of Queensland complement the main wine-grape regions. This is not an exclusive list. One can be surprised at where one comes across a local wine producer. A highly productive year, such as 2005, saw over 1 Mt of red wine and nearly 900 000 tonnes of white wine grapes crushed, with shiraz and chardonnay the top varieties. There is nothing to suggest anything but a full-bodied or otherwise sparkling future for Australian wine. There is no evidence that this natural product (some is organic) will be replaced by synthetic dinnertime beverages.

Australian competitive advantages and export opportunities Geography (proximity to Asian markets compared to other southern hemisphere producers in South Africa and South America), reputation for quality (relatively low use of chemicals, freshness, and a ‘green’ image) and value for money (notwithstanding the cost advantages in low-income Asian countries) are Australian fruit and vegetable growers’ competitive advantages. In addition, as noted previously, the vast range of climates and growing conditions in Australia permit a large variety of products to be grown, and this over four seasons (although Australians tend to think in terms of two dominant seasons). Another positive selling point for Australian exports is the increasing demand for packaged fresh produce. In health-conscious Japan, and with its consumers’ preference for packed vegetables and fruit slices, this consumer attitude is most obvious. Busy people, households where both partners are in employment, and single-person households find the convenience of small packages of fresh food appealing. In concert with our experience with Japan, we can expect strong growth in demand by the Chinese middle class as its numbers increase. Australia’s government promoter of the nation’s products, Austrade, compiles lists of foods that various countries are likely to find attractive. Table 14.3 provides an example based on Japan. Table 14.3.  Australian-grown vegetables and fruit that could be exported to Japan Fresh vegetables

Fresh fruits

onions carrots pumpkin (from Tasmania) asparagus broccoli mushrooms leek lettuce cabbage cauliflower kale legumes sweet corn truffles

mangoes citrus table grapes rambutan apricots cherries (from Tasmania) apples (from Tasmania)

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Japan is far from the only Asian market for Australian horticultural products. The relatively rich Singaporese, South Koreans and Taiwanese plus Hong Kong residents seek broadly similar products to the Japanese. The middle classes of Thailand and Malaysia are also consumers. Consider Hong Kong as an example, not only in terms of eating habits on the island, but also the propensity to influence the Chinese mainland middle class. Hong Kong consumers are very high on the list of people with a healthy per capita demand for fresh foods. As one of the virtually ‘free trade’ markets in the world, Hong Kong consumers can turn to where ever they like for their fresh fruit and vegetables. Naturally they turn to mainland China as a low-cost vegetable-growing country. They also look to Thailand, also low cost, for both fruit and vegetables. The United States comes in at number three as the source of imported products, and Australia fourth. The products in demand in Hong Kong include onions, tomatoes, lettuce, celery, asparagus, cauliflower, Chinese cabbage, potatoes, carrots, cucumbers and root vegetables. The fruits include pears, papaya, mangoes, bananas, citrus, apples, table grapes, melons, plums, cherries and nectarines. For those with a keen focus on China and the Asian countries where people celebrate Chinese New Year (and other festivals), the ability to supply speciality food products for these festivals is not to be forsaken.

In conclusion Much more could be written about the present success, the considerable potential and the trials and tribulations of Australian horticulture. We have made much of geography, in terms of a short distance to growing foreign markets, and the benefit of being located in the southern hemisphere while our main customers are in the northern hemisphere. We have also pointed to Australia’s clean and green image as a horticulture producer. In certain parts of Australia horticulturalists are dependent on irrigation. As noted, irrigation can have its drawbacks, not only on the farm but off-farm. The Murray–Darling Basin, the wonderful food bowl that it is, is fraught with water-allocation management issues. The Great Barrier Reef, with its unique biodiversity values, not to downplay the foreign tourist dollars it generates, is under serious threat if we do not continue a program of reducing the nutrients, chemicals and sediments that run off the coastal Queensland farms. These are challenges for irrigated horticulture. Horticulture is an agricultural industry generally suited to drip irrigation and fertigation, and considerable drip irrigation is already in place for a variety of crops. As one would expect, crops with a high value per hectare allow for the installation of drip irrigation and fertigation. The challenge is to introduce these methods to other crops and to have all farmers involved. A thorough study of the economics of wide-scale investment in drip irrigation and fertigation is the first step. If, after accounting for externalities and imposing a long time horizon, the result is an increase in net benefits, we have the answer. If this is not the case, more thinking and research is required. It should not be beyond our intelligence to continue to have a vibrant, profitable horticultural industry and a healthy enduring environment.

15

Sweet dreams of sugar J. Chiomey and T. Hundloe

Introduction Stretching from the far reaches of the Wet Tropics in Queensland’s north at Mossman to south of the Queensland border into New South Wales, the sugar-cane industry supports just over 4000 farmers, who produce on average around 32–35 Mt of sugar-cane per year, at a value of between $1.5 and $2.5 billion per annum. The range rather than exact figure provides an appreciation of the fluctuations that are the common experience of the industry. Global production has a major bearing on the price Australian growers receive. There are 24 sugar mills across the two states. About 95% of the production is in Queensland, and in the order of 85% of production takes place directly adjacent to the Great Barrier Reef (the Reef). Herein lies a problem for one of Australia’s major agricultural export industries. As with many agricultural industries, the number of farmers (and farms) have decreased while farm sizes have increased. Some changes have been recent; for example, in 2004 there were ~5200 cane farms, down to 4000 at the time of writing. The tonnes of cane grown per farmer in 2014 is greater than that of the average farmer in 2004, as one would expect with the larger farms. Sugar-cane growing is no different from much agricultural production in being at the mercy of extreme weather events. A cyclone will flatten cane; a flood will drown it. The water is welcome when it is not causing damage. The cyclonic winds are never welcome. Then there are the ups and downs and roundabouts of the markets. Sugar-cane producers are price-takers and hence exposed to volatility in world market prices. Notwithstanding the hedging that is available by operating in futures markets, the exposure to price risk cannot be eliminated. Movements in exchange rates come into play. On the cost side, diesel and fertiliser prices have tended upwards.

Australia’s most troublesome externality The run-off of fertilisers, pesticides and sediment pose grave threats to one of Australia’s greatest treasures. It has been known for some time now that the Reef’s health is in serious decline, with much blame being pointed towards the vast cane fields of its catchment. Numerous river catchments drain into the Reef lagoon, but we can think of them as a system and, hence, as one. 187

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Sugar-cane is not the only agricultural industry in the catchment and hence cannot take all the blame. In a previous chapter we discussed the beef industry and its role when poorly managed. Furthermore, not all damage is a result of farming: there is the run-off from the coastal cities, and nature can wreak havoc in the cyclone season. The predation by the crown-of-thorns starfish is yet another problem. There are suggestions that population booms of the starfish are correlated with run-off from the mainland. Before explaining why the cane industry takes much of the blame for negative impacts on corals and their associated marine life, a little geography is necessary. Most sugar-cane grown in Australia is concentrated within three locations: the Wet Tropics, the Burdekin Dry Tropics and Mackay–Whitsundays region. These are areas of mixed soil properties, varying subsurface draining qualities and monsoonal wet periods, and prone to natural disasters such as cyclones and flooding. These factors, along with the vagaries of the global sugar market expressed as high price volatility, put pressure on farmers to increase yields of cane that has high sugar content, at as little cost as possible. The uncertainties involved, in particular the risk of under-production when prices are increasing, result in behaviour that would be less likely if weather and prices could be predicted with greater certainty. We are getting better at predicting El Niño and La Niña years, but extreme weather events such as cyclones tend to make their own rules. Furthermore, prediction does not stop damaging weather from occurring. We also have difficulty in forecasting global sugar prices, as two major sugar producers, Brazil and India, set output targets or subsidies to suit their growers and we struggle to discover the formulae they use. There is nothing we could do to counter them even if we were in the know. Over-fertilising is an option that is commonly used to try to maximise yield. Much of this fertiliser is wasted as it runs off the farm. If it gets to the Reef, damage is caused. Fertiliser used on sugar-cane is high in both nitrogen and phosphorus. It is these two elements that enable the sugar-cane plant greatest growth, with hopefully high sugar yield. It is also these two elements that cause most harm to the Reef.

Sugar production versus the Reef There are estimates of dramatic decreases in coral cover over parts of the Great Barrier Reef. Some areas, such as in the far north, remain in near-pristine condition, while south from Cooktown–Cairns much damage has occurred, with some locations losing 70% of hard coral (Brodie et al. 2013). This is a dramatic figure when one considers the role the Reef plays in terms of biological diversity, as well as its contribution to the nation’s economy as a tourist destination and, at a much lesser scale, its fisheries output. The Reef is the single most important tourist attraction in Australia. In 2012, the economic contribution to Australia through tourism associated with the Reef was over $5.5 billion. This figure doesn’t count the flow-on effect. With this added indirect contribution, the figure sits at around $7 billion (Deloitte Access Economics 2013). From this it is easy to understand how important the Reef is in providing jobs in the adjacent coastal region, in particular the major cities such as Cairns, Townsville and Mackay.

The crown-of-thorns One of the serious problems associated with high amounts of fertiliser run-off reaching the Reef is the threat posed to coral reef communities through more frequent population

15 – Sweet dreams of sugar

outbreaks of the crown-of-thorns starfish (Acanthaster planci). When crown-of-thorns starfish undergo a population explosion, they consume extensive amounts of coral. A plague-like outbreak will only occur when spawning coincides with ideal conditions for their larvae. It is believed that increased nutrient levels in the water, as when nitrogen and phosphorus levels are increased due to fertiliser run-off from agriculture, stimulate growth in the early stages of the animal’s life.

There is a likely solution Elsewhere in this book we have given over much space to the discussion of various forms of irrigation. We have also focused on the application of fertilisers and pesticides and herbicides in our attempts to maintain the productivity of soils and counter the loss of crops to pests of all kinds. Undoubtedly, it is in the interests of the Reef – protecting it as a World Heritage Area and sustaining the tourist industry that depends on its health – and of cane farmers to reduce, significantly, the application of fertilisers, pesticides and herbicides. Fertilisers and pesticides are not cheap, so the less of these inputs that farmers are required to use to protect their livelihood, the better off they – and the Reef – are. The likely solution is fertigation. Fertigation means reduced, targeted, irrigation via drip-feeds, with fertiliser introduced to the irrigation water in optimum quantities. It is already being used at a limited scale. The next step is to determine the most cost-effective means of bringing it to every cane farm. If the result of not converting flood irrigation to drip irrigation and fertigation is the loss of tourism income, we have a ready-made estimate of what should be spent on the farms. Who is to pay remains an open question.

Australian sugar: a small but important export industry We expect sugar to be in demand for the foreseeable future, and we expect demand to increase in line with the growing number of middle-class consumers world wide. Think of your favourite treats. Ice-cream is more than 20% sugar. Sugar gives it smoothness and thickness. Soft drinks contain 10% or more added sugar. Cakes, lollies and jams all contain ample sugar. You also find sugar in unexpected foods such as tomato sauce, canned soup and preserved meats. Then there are the by-products. The most common one is molasses, which is distilled to become rum. Australian rums are named after towns with a sugar mill – Bundaberg rum and Beenleigh rum. Ethanol (industrial alcohol) is made from molasses. Farm animals are fed on molasses. Then there is bagasse, the sugar-cane fibre, which remains after the sugar juice has been extracted. Bagasse provides nearly all the fuel required for steam and electricity generation in the sugar mills. Finally, there is ‘mill mud’, the residue left after sugar has been clarified. It makes great fertiliser. Much is returned to cane farms.

Exports In the order or four-fifths of Australia’s raw sugar is sent overseas. In this we compete with the best, Brazil, and several smaller players. Australia ranks number nine in the world in terms of production, following Brazil, India, China, Thailand, United States, Mexico, Pakistan and France. Around 70 countries grow sugar-cane, and ~40 grow beet sugar. Beet sugar represents about one-fifth of sugar produced in the world. Australia ranks number three in the world in terms of exports. It is our second largest export crop, and we would not want to lose this industry.

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Environmentally friendly sugar-cane To find an environmentally friendly way of growing sugar-cane is currently the all-important sustainable farming challenge in Australia. Fortunately an expanding group of sugarcane farms are experimenting with – and confirming the benefits of – innovative farming methods. For example, some are taking advantage of soil-testing technologies. The results determine nutrient requirements across the paddocks, with amounts varied according to need in specific parts of the paddock. The soils are no longer treated as if they are uniform. Another innovation is the increasing integration of other crops in the fallow season. These include chickpeas, soybean, mung beans and other legumes. Surprisingly, corn is being trialled as a rotation crop. More use is being made of mill mud. Of great interest is the experimentation with drip irrigation. While only a small number of farms are involved at present, many farmers are interested. How the on-farm economics pans out will be crucial. The future of cane farming in the Great Barrier Reef catchment is likely to depend on the results.

16

The chicken before the egg J. de Miranda

Introduction The animal that is commonly called a ‘chicken’, regardless of its age, was domesticated ~8000 years ago. While it is thought that there were multiple geographical origins of the domesticated fowl, pride of place goes to India. The wild animal from which it was bred was the red jungle fowl, a bird still found in Asia. We know that the domesticated chicken ended up in Greece, in Egypt and in New Guinea, and from New Guinea on to the Solomon Islands, Vanuatu and Polynesia. When and how it arrived in the Americas is debated. Today, the chicken is common and widespread. Its meat and eggs are consumed around the world. It has been estimated that at any point in time there are 50 billion chickens in the world, seven for every human. To avoid confusion, it is important to sort out terminology. This we do in Box 16.1.

Box 16.1: When is a chicken not a chicken? In Australia, the generic name for any type of chicken is a chook. A common generic plural term is poultry; otherwise fowls. A young chicken is a chick. A female chicken over one year of age is a hen. A female chicken under one year of age is a pullet. But, note that when a pullet commences to lay eggs at 16 to 20 weeks, it is called a hen. A male chicken over one year of age is a cock or, more commonly in Australia, a rooster. A male chicken under one year of age is a cockerel. If a chicken is reared for meat, or after egg-laying is finished, it is called a broiler. The meat of any chicken, chook, fowl, hen, pullet, rooster, cock, cockerel or broiler is chicken. In some countries, an egg-laying hen that has completed that stage of its productive life becomes a soup hen. Australians talk of retired laying hens as old broilers.

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The chicken meat and egg industries in Australia run completely separately, even though both produce chickens. Eggs produced in the chicken meat industry are only used to produce the next generation of chickens that supply meat. Egg-laying chickens come from different breeds and have been bred selectively for many generations to optimise the egg production: see Chapter 17.

Chicken meat in Australia Meat chickens consumed in Australia today do not look like their wild ancestor, as they have been selectively bred over a very long period and only the most desirable poultry genes have been preserved. In Australia, poultry designed for meat consumption differ markedly from egg-laying chickens, bred and reared for egg production. The vast number of village chickens in the rural areas of the poorer countries are less specialised because in general village people cannot afford to purchase the selectively bred chickens. A small number of companies in United States and United Kingdom specialise in selectively breeding meat chickens. They are the ultimate source of poultry genes for most of commercial chickens consumed around the world, including Australia. Because Australians can afford it, chicken meat sold and consumed throughout Australia has originated from the best poultry genes in the world. For quarantine protection, breeding hens are not imported as grown birds but as fertile eggs. These eggs are carefully selected from top-quality disease-free flocks and transported by air to Australia in sealed containers to avoid any contamination. Once they arrive in Australia, the eggs are sent immediately to quarantine. Quarantine monitoring is complete when the chickens from the imported eggs are nine weeks old. Chickens released from quarantine are not consumed as meat in Australia; instead they are used to produce a new generation. These original birds are known as ‘great-grandparents’ since they are three generations removed from the chickens we buy in supermarkets in Australia (see Fig. 16.1). In 2006, the Australian Chicken Meat Federation released a research report that found that 80% of Australians wrongly believed that chickens were fed with hormones or ‘something artificial’ to get them to increase in size, and do this quickly. However, hormones have been banned in the Australian chicken meat industry for over 40 years. Today’s chickens grow so large so quickly as the result of selective breeding. Only the strongest and biggest chickens from each generation are chosen to breed, and this has resulted in a major improvement in their growth rate and size. The process is incremental but over several generations the differences are dramatic.

How is chicken meat farmed? There are three types of chicken meat farming in Australia: broiler, free range and organic. Broiler farming is the most common commercial farming and produces around 85–90% of the total. It is a highly mechanised operation which is undertaken in relatively small areas compared to the other farming methods. When fertile eggs from the parents’ generation hatch, one-day-old chicks are transported from the hatcheries to broiler farms and placed in large sheds that, for example, can be 150 m long and 15 m wide. Each shed will contain from 40 000 to 60 000 chickens, and on average each farm houses ~320 000 chickens spread over eight sheds. Chickens are not kept in cages but they are confined to their sheds, not allowed outside. Broiler sheds receive

16 – The chicken before the egg

GREAT GRANDPARENTS

GRANDPARENTS

Imported as fertile eggs and kept to produce fertile eggs for next generation known as Grandparents.

Kept to produce fertile eggs for next generation known as Parents.

CHICKEN MEAT These chickens are the last generation and will be consumed by humans.

PARENTS Produce fertile eggs that will become chickens consumed by humans.

Fig. 16.1.  Imported eggs to chicken meat.

natural ventilation from openings in the side of the sheds and these are controlled to maintain an optimum temperature. Chickens are fed from automatic feed lines connected to silos outside, and water is also supplied automatically through water pipelines. Unlike the egg industry, both male and female chicks are reared for chicken meat. From the day the chicks arrive until when they are ready to be harvested, only around 4% are lost due to natural causes or selective culling. Harvesting depends on the market need for birds of different sizes or weights. The first harvest can be at 30–35 days and the last at 55–60 days. Once all chickens are removed, the shed is cleaned and prepared for the next batch of one-day-old chicks, and they are brought from hatcheries one or two weeks later. Thus, farmers’ production per shed is ~5.5 batches per year, since each flock spends six to seven weeks in a shed and there is a break of two weeks when sheds are cleaned and prepared for the next flock. Feed consists of 85–95% grains and for this reason the cost of production is substantially affected by fluctuations in grain prices. Meat chickens have strict nutritional standards and the grain mix is calculated by computer programs that seek the least-cost food formulation according to the availability, price and quality of the specific ingredients, the location from where they are sourced, seasonality, and, because age has a bearing on the food required, the age of the birds. The diet of chickens in the south-eastern states is based on wheat, while in Queensland it is sorghum. Grains do not provide all the amino acids that meat chickens require, and so the amino acids lysine and methionine are added to the food, as well as vitamins and minerals if needed. Chicken farms are under constant and intense hygiene pressures to protect the flocks’ health. Vaccinations and biosecurity practices help farmers to prevent diseases spreading among chickens from wild birds, from other farms, and from parents via eggs. Greatgrandparents, grandparents and parents are vaccinated against a variety of diseases.

Free range and organic chicken Free range and organic chickens are the other types of chicken meat produced in Australia. At present, they represent 10–15% and 1% respectively of the total production. These proportions continue to increase as more and more consumers seek out free range and/or organic chicken meat.

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Free range farming follows the same procedure of broiler production regarding feeding and housing, but chickens are allowed to go outside during the day and are given more room in their shed. There are strict standards required by the overseeing body, Free Range Egg and Poultry Australia Ltd (FREPA) that farmers have to follow to produce and sell certified free range chickens in Australia. Certified organic meat chickens must be fed no genetic modified organic ingredients and birds cannot be vaccinated. In order to produce and sell organic chickens, farmers must comply with the National Standard for Organic and Bio-Dynamic Produce. Table 16.1 compares the three main commercial chicken production methods in Australia. Chickens sold as ‘chemical-free’ in Australia come from the same conventional production system; the difference is during processing. In the processing plant, non-chemicalfree chicken carcases are submerged in water with ice to cool them to –5°C and the water is sanitised with chlorine at levels of 3–5 ppm to prevent any microbial contamination, such as salmonella and campylobacter. Chemical-free chicken carcases are not sanitised in water with chlorine; instead the water is sanitised by ultraviolet light exposure.

How much chicken is consumed globally? Total global meat consumption has significantly increased in recent decades as demand rocketed from 173 Mt in 1990 to ~285 Mt in 2010. Chicken meat followed this trend and rose from 23% of the total global consumption in 1990 to 35% in 2012. This represents an increase of around 100 Mt (Australian Chicken Meat Federation 2011a). The growth in chicken consumption is in part driven by its affordability compared to other meats. The intensive farming of chickens has brought about vast economies of scale. Two generations ago, when chicken farms were in the main small, and it was not unusual for both meat and egg-laying chickens to be free range, chicken meat was a luxury item. Christmas time was the occasion to serve roast chicken. Home-grown chickens were let live until Christmas eve. Not only scale economies, but other factors have driven the increased consumption of chicken meat; in particular, increased awareness of its dietary benefits (Australian Chicken Meat Federation 2012). Demand for chicken meat is expected to increase to the extent that chicken meat will trump all other meat consumption. Today, the United States, China and Brazil are the world’s largest chicken meat producers and they are also the top consumers (FAO 2009). It is likely to remain the most affordable meat. The forecast for an increasing demand for chicken meat is based on predictions of increasing prices for red meat. For many consumers red and white meats are substitutes, hence price differences determine purchase choices. It is possible that an increase in preferences for free range and organic chicken meat, particularly in the rich countries, will drive the price up. Very little land is required to house intensively farmed fowls. There is the need for land on which to grow the grains on which the birds are fed. With free range fowls there is a considerable increase in land; land that is improved pasture requiring fertilisation and watering, plus land on which to grow supplementary foods. Even then, land is not a constraint due to the small size of even the largest free range poultry farms. This gives chicken meat production an advantage over other, more land-intensive, meat production.

Chicken meat production and consumption in Australia The chicken meat industry in Australia is vertically integrated, which means that the same companies own and control almost every step of the production chain, including the

16 – The chicken before the egg

Table 16.1.  Comparison between different chicken meat production methods in Australia If chicken meat is sold as:

Conventional

Free range

Certified organic

Kept in cages Housed in large barns Access to outdoor forage areas during daytime

No Yes No

No Yes Yes. Required once chicks are adequately feathered

Stocking density maximum (inside the barns)

28–40 kg/m2 depending on the standard of the ventilation provided in barns 35–55 days No Yes

Feed consists mainly of grains Feed may contain supplements such as vitamins and amino acids Feed has to come from organic production (no chemical fertilisers, pesticides and herbicides used) Use of GM products in feed

Yes

No Yes Yes. Required once chicks are adequately feathered 16–32 kg/m2 depending on the standard of the ventilation provided in barns 35–55 days No Depends on accreditation program (under some standards, if antibiotics are required, meat may no longer be sold as free range) Yes

Yes

Yes

Yes

No

No

Yes

Yes, to a limited extent (soy meal is not available in sufficient quantities from local sources and imported soy meal may contain GM grain)

No

Model Code of Practice for the Welfare of Animals applies Controls in place to ensure adherence to these standards

Yes

Yes, to a limited extent (soy meal is not available in sufficient quantities from local sources and imported soy meal may contain GM grain) Yes

Most chickens are grown under contract to processors and the farms are supervised by the processor’s farming manager and vet

Monitored by industry associations that accredit farms such as FREPA; comment under ‘Conventional’ also applies here

Accreditation provided by organisation approved by the Australian Quarantine Inspection Service; independently audited

Age of birds at harvest Given growth hormones May be given antibiotics for prophylactic and/or therapeutic purposes

Source: Australian Chicken Meat Federation (2012).

25 kg/m2

65–80 days No No (if antibiotics are required, meat can no longer be sold as organic)

Yes

Yes

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breeder farms, hatcheries, chicken-growing farms, processing plants, feed mills, and research and development laboratories. This degree of control ensures good quality consistency in tenderness and flavour. Consistent high quality with the low price compared to other meat has resulted in steady growth of the consumption of chicken in Australia. Chicken meat has become the preferred meat. On a per capita consumption basis Australia is in the top five globally. The generational change in chicken consumption was mentioned above. In 1963, the per capita consumption of chicken meat was 4.2 kg per year. By 2010, the Australian per capita consumption was 44 kg per year. This 10-fold increase over two generations is very impressive. Based on the recent statistics, the chicken industry forecasts a continuous increase in chicken consumption, and by 2020 it might exceed all red meat consumption combined (Australian Chicken Meat Federation 2012). As previously mentioned, the increase in production and consumption of chicken meat in Australia is strongly linked to its competitive price compared to other meat, and this results from both scale economies and advances in animal growth. The latter is a function of what nutritionists call the ‘feed conversion ratio’. In 1975, chickens used to take ~64 days on average to reach the ideal weight of 2  kg before being harvested. The average chicken ate 4.66 kg of feed over that period. In 2011, chickens reached 2 kg weight in just 35 days on average with a consumption of ~3.4 kg of feed over that period (Australian Chicken Meat Federation 2011b). This represents a significant reduction in the amount of feed and time necessary to grow a chicken to commercial size. Moreover, technological improvements in processing and elsewhere in the supply chain have contributed to a reduction in production cost. Australia has strict quarantine measures to prevent diseases from entering the country. Therefore, Australia does not import any fresh chicken meat and only imports a small quantity of canned chicken, and this has gone through prolonged exposure to high temperatures to eliminate any potential disease. To give an idea of the minuscule international imports, from 2000 to 2010 Australia imported 60  t of chicken meat while producing during the same time over 7 Mt of meat for domestic consumption. Since live birds cannot be imported, the only imports are fertile eggs for breeding purposes. These are subject to intensive quarantine measures as described above.

Chicken meat processing All chicken meat processing in Australia commences in a plant where the birds are slaughtered and cleaned. At this first stage, the birds are either left whole, cut into pieces or filleted, and then sent frozen or chilled to distributors, or to the second processing stage. Based on estimates from the industry, nearly 70% of the total Australian chicken meat is sold either as fresh or frozen raw meat, which means no further processing. Of this near to 90% is sold fresh, either in pieces or whole, and only 10% is sold frozen. This shows the strong preferences for fresh chicken meat in Australia. Approximately 30% of the total chicken meat production is sent to the second processing stage, where chickens are likely to be cut, crumbed and cooked. Further processing consists in transforming chicken meat into familiar and popular products such as chicken nuggets, chicken skewers, chicken tempura, chicken burger fillets and crumbed chicken. Supermarkets play an important role in the distribution of both raw and processed chicken meat. In the order of 40% of raw chicken is sold through them, and about onethird of processed chicken meat. Wholesalers sell near to one-fifth of raw chickens and fast-food restaurants sell about one-third of processed chicken meat.

16 – The chicken before the egg

How sustainable is chicken meat production? Different types of meat production have different impacts on natural resources and consequently different impacts on the environment. Among all terrestrially produced meat there is an argument that chicken is the most environmentally efficient. The reason is the efficiency of chickens in converting feed into meat, which reduces the amount of natural resources needed, such as grains and water. Chicken meat production requires 28 times less land and 11 times less water than beef per unit. Another factor that makes chicken meat more efficient is that it requires a low stock of chicken breeders to maintain the global chicken population. Compared to beef, each hen may produce up to 250 fertile eggs per year, while cows give birth to only one calf per year on average. Given the focus of this book on export trade we need to ask if there is any scope for high-cost Australian chicken producers to find export markets. Probably not. However, we should not completely discount opportunities that might arise. The importation of ducks from the United Kingdom by the Chinese for the purpose of preparing Peking duck should not be overlooked. Could something like this come into play for quality chicken meat?

Exports Even though most chicken processing plants in Australia are licenced to export and, obviously, meet the AQIS Export Control Orders requirements, only minimal quantities are exported. The global demand for chicken is largely met by countries with lower production costs than Australia. Some countries support their chicken meat industry with subsidies. Less than 5% of Australian chicken production is exported; most of this goes to South Africa, the Philippines, Hong Kong, Singapore and the South Pacific. Around 95% of chicken exports are composed of frozen cuts and edible offal such as feet, liver and kidneys, and the other 5% is frozen whole chickens (Australian Chicken Meat Federation 2012).

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17

Eggs J. de Miranda

Introduction A hen can produce over 300 eggs per year but usually output is a little less, ~250. Approximately 1500 billion eggs are produced throughout the world every year. Around 1200 billion eggs were consumed in the world in 2011, corresponding to 171 eggs per capita per year. Not all eggs are eaten as eggs; many are consumed as ingredients in cakes and a large variety of prepared foods. The global egg consumption has increased ~10% from 2000 to 2011, when in the earlier year 963 billion eggs were consumed corresponding to 157 eggs per capita per year. Humans like eggs, and are eating more of them. China holds the position of the largest egg producer in the world, but Netherlands has become the top egg exporting country, followed by the United States. Germany is the main egg importing country in the world. Australia does not rank, and imports in dollar terms more egg products (egg powder and egg pulp) than it exports. The world’s egg production is divided equally between white shell and brown shell eggs. In Australia, most eggs produced and sold are brown, in response to research that showed a preference for brown eggs. This is possibly because brown is seen as a more ‘earthy’ colour than white, that is, as more ‘natural’, although in reality the colour of the egg is determined by the breed of hen.

Industry overview Chicken eggs are produced in virtually every country in the world. This does not mean that every country has commercial egg-producing enterprises. What it does indicate is that even in the poorest of countries a villager is likely to have a few hens scampering around scavenging food and laying eggs. Eggs are eaten in various forms, and as an ingredient in a great variety of processed and home-cooked foods. It is very difficult to obtain an accurate picture of the global production of eggs. Not all eggs consumed are chicken eggs – ducks, geese and a host of other birds lay eggs that humans eat. We are on surer ground with an estimate of the number of laying hens in the world, ~6–6.5 billion (approaching one hen per person). Near two-thirds are in Asia. China leads the world in global chicken egg production. In the order of a fifth of egg producing hens are in the Americas, where ~10–15% of this number lay eggs for breeding 199

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purposes. Europe has about three-quarters of a billion egg-laying hens, while Africa has about half a billion. A tiny fraction, ~20 million egg-laying hens, are in Oceania.

Egg production in Australia In December 2011, the flock size in Australia was estimated at 16.5 million layers. In that year, 392 million dozen eggs were laid. This volume generated a gross value of production at farm gate of $572.2 million and a gross value of production at market of $1.595 billion (AECL 2012). The latter is the price charged to consumers due to the addition of all costs beyond the farm. In 2011, egg consumption in Australia was 211.5 per capita. Approximately 10% of eggs come from backyard production; in other words, from private pens on suburban or periurban blocks plus farmers who have fewer than 1000 hens. These hens are not subject to regulatory requirements such as vaccination.

Egg consumption in Australia Feeding laying hens is the main cost in egg production, reaching up to 60% of total production cost. Therefore, any alteration in feed costs is directly reflected in the final production cost, and this will consequently increase the price of eggs at the farm gate. In recent years, retail prices for eggs have increased less than the cost of living. Reasons for this are increasing scale economies and competition. In 2015, the average cost of production of 70 g eggs (the most popular size) is estimated at $1.25 per dozen for cage eggs, $1.70 per dozen for barn eggs and $2.15 per dozen for free range eggs. The selling prices are: $3.35, $4.80 and $5.35, respectively (average prices). Following the deregulation of egg production and marketing in 1989, the egg industry in Australia has experienced considerable change. It became easier to enter into the industry. A consequence was a reduction in the number of producers and an increase in farm size. The small producers left for a variety of reasons, of which competition with the larger producers was a major factor. From the establishment of egg marketing boards in the 1920s until their demise, eggs were produced by small-sized operations, with anything from 500 to 5000 hens. In the case of the former, a few chooks would have played their income-earning role on a dairy farm, which also would have had a small pigsty. The fowls were housed in a shed surrounded by an extensive free-range area enclosed by a high wire-netting fence to keep foxes and goannas out. The larger, specialised egg farms tended to be located on the periphery of cities, close to the consumer. In the 1960s, layer cages were introduced and egg producers went from extensive, freerange farming to intensive egg production. Farm sizes increased dramatically, in terms of poultry carried but not in land required. The number of egg producers dwindled. There was an order of magnitude decrease between 1980 and the present era. As of June 2013, the Australian Bureau of Statistics reported that there were only 277 egg farms in Australia. A very large farm in the present era could house half a million laying hens. In the 1950s, a dairy farmer might have had 500 laying hens to use up some of his separated milk, mixed with laying-mush. The few eggs produced were sold locally, or sent to an Egg Marketing Board, and provided a minor supplement to the dairy-farmer’s income. The consumption of eggs decreased from 220 to 145 eggs per capita over the 1980s when research suggested a correlation between egg consumption and high cholesterol

17 – Eggs

levels and heart disease. Further research dispelled the supposed link and the nutritional image of eggs has slowly improved, contributing to a recent increase in egg consumption. The egg market is continually changing. We are noticing a shift to organics as we write. However, the chook-friendly, health-conscious consumer tends to move up a pyramid as the following data illustrates. Today retail sales volume are: 55% for cage eggs; 34% for free range; and 9% for barn-laid eggs. Organic eggs have a small percentage in retail sales (AECL 2012). The artificial colouring of the yolks of non-organic eggs is likely to increase demand for the real thing.

The future It could be expected that the demand for free range and organic eggs will continue to grow. The recent evidence from northern Europe suggests a dramatic increase for organic eggs (AECL 2012). With growth in demand, economies of scale will result in price decreases. What is far less certain is whether there is much interest in Australia in value-adding by producing egg powder, pulp and liquid. If nothing else the local industry could eliminate imports of these products. The next step would be to make a serious attempt to export these value-added egg products.

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18

Australian fisheries production D. McPhee

Introduction The seafood industry is currently Australia’s sixth largest primary industry. Fisheries resources were an important source of food for Indigenous Australians and continue to be both a food resource and important in social systems for some communities (Bailey 1975; Walters et al. 1987; Ross and Tomkins 2011), and they have played an important role in Australia’s food security more generally since European settlement. Seafood is harvested by commercial fishers from the wild (oceans, rivers, lakes) or produced on farms (aquaculture and mariculture). Recreational fishing is an important part of the overall fisheries picture, and recreational fishers may obtain all or part of their seafood needs by their own efforts. The focus of this chapter is on wild fisheries and aquaculture (mariculture is subsumed) and their contribution to national food production and export. Fishing and aquaculture are unique in the context of Australian primary industries in that they are founded on the use and development by individuals of publicly owned natural resources, managed on behalf of Australian communities by governments. Australia is blessed with an exceptionally diverse marine fauna, but the productivity of the marine environment is relatively low and most of the continental shelf (the more productive part of the ocean) is narrow. Australia lacks the fisheries resources upon which large high-volume single-species fisheries are built upon elsewhere in the world – examples being the Peruvian anchovy fishery and the Alaskan pollock fishery. Further, there is a general paucity of freshwater and native freshwater fisheries resources that can be harvested sustainably in large volume. As a result of these limitations, but also as a product of the diversity of fisheries resources available, Australia has evolved a myriad of fisheries using a vast array of fishing gears. Collectively these fisheries make a substantial contribution to the domestic supply of seafood, while they also contribute substantially to exported product. Most aquaculture in Australia, with the exception of oyster farming, is relatively new (less than 30 years old), but it too provides food for domestic consumption and export, while operating in a constrained environment.

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A brief history Australia’s first large-scale fishery was the harvesting of oysters from the wild. As well as oysters being used for food, the shells were used for lime in cement and to make fertilisers. The oyster fishery commenced virtually from the time of the First Fleet, with the first settlers being amazed at the size and quantity of oysters in the uppermost coves of Sydney Harbour, but its heyday was in the 19th century (Ogburn et al. 2007). Elsewhere, around the original penal settlement of Brisbane, oyster harvesting blossomed between 1870 and 1900 and it was considered to be one of the foremost industries in the early days of the Queensland colony (Lergessner 2011). The first rush in Queensland was not the gold rush – it was the oyster rush! Fashionable ‘oyster bars’ sprang up throughout inner-city Brisbane and elsewhere – the forerunner to the modern café society. The Brisbane oyster fishery crashed in the early part of the 20th century, with increases in the supply of sediment to estuaries and embayments. The initial extensive land clearing that occurred in coastal catchments was the most likely main cause (Diggles 2013). While oysters are still cultured today intertidally and oyster farming represents the oldest form of aquaculture in Australia still in operation, the harvest remains very much smaller than the historic levels despite substantial advance in our knowledge of oysters and husbandry techniques (Ogburn et al. 2007). While small-scale coastal fisheries targeting inshore species such as sea mullet, various species of whiting and bream sprang up along virtually the whole coast wherever settlements occurred, the history of two fisheries are worth further brief discussion because both are large by Australian standards and they continue to contribute substantially to seafood production. These are the Northern Prawn Fishery and the South East Fishery. In the early 1970s, exploratory research trawling identified the presence of large quantities of banana and tiger prawns in the south-eastern Gulf of Carpentaria. Initial commercial interest was focused on banana prawns with early catches still the subject of legend today – very large catches taken in a matter of minutes as extensive visible spawning aggregations were targeted. A rush to build boats and enter the fishery ensued and the management of the fishery was merged with other northern Australian prawn grounds (e.g. Joseph Bonaparte Gulf) to create what is now known as the Northern Prawn Fishery (NPF). The initial open-access nature of the fishery (there was no limit to the number of vessels that could enter the fishery) resulted in over-capitalisation, where the economic yield from the harvest was less than optimal and profitability for licence holders was low or indeed unprofitable. Management of the fishery over a long period of time has focused on reducing the number of vessels in the fishery. This has come at significant cost to governments (and therefore the taxpayer) through vessel buybacks and industry restructures.17 The destination of product from the fishery has waxed and waned over time, with varying quantities of both banana and tiger prawns being exported. Currently, banana prawns from the fishery are offered in major supermarket chains in Australia, and have been for some time. By dollar value at $71 million in 2013, the Northern Prawn Fishery is Australia’s most valuable wild fishery. It is with much apprehension that the prawn fishers in the Gulf follow the news stories that large dams will be built on the rivers that flush out the juvenile prawns that grow to become the source of their income. A trawl fishery developed off the coast of New South Wales in 1915. The fishery has been known by various names over the years and has had many jurisdictional arrangements. It is currently managed by the Commonwealth as part of the Southern and Eastern Scale-fish and Shark Fishery. The trawl fishery is noteworthy because it supplies a substantial amount of fresh fish to Sydney and Melbourne markets and from there fresh fish is

18 – Australian fisheries production

distributed throughout the metropolitan areas and regionally. If you have purchased any amount of fresh fish or eaten seafood in restaurants in Sydney or Melbourne, it is highly likely that at some stage you would have eaten fish from this fishery. The historical development of the South-east Trawl Fishery is documented in Tilzey and Rowling (2001), Grieve and Richardson (2001) and Smith and Smith (2001). Its history shows that it shifted on to new species and new areas when catch rates declined. Before 1930 the principal target species was tiger flathead (Platycephalus richardsoni), but during the 1940s this species was replaced by redfish (Centroberyx affinis) and morwong (Nemadactylus spp.). The area of the fishery continued to expand from the historic areas adjacent to the NSW coast to waters offshore of Victoria and Tasmania in the 1970s and 1980s respectively. In the mid-1980s increased targeting of orange roughy (Hoplostethus atlanticus) and blue grenadier (Macruronus novaezelandiae) occurred, shifting a significant amount of fishing effort into the eastern Bass Strait (McPhee 2008). Concerns regarding overfishing in this fishery were voiced as early as the 1950s (Tilzey and Rowling 2001; McPhee 2008). Fisheries management has focused on substantially reducing fishing effort, reducing the overall environmental impacts of the fishery, and enhancing the economic efficiency of the fleet. While its current importance in terms of domestic food production is less than it once was, it remains an important supplier of a diverse range of fresh seafood, particularly in Sydney and Melbourne. With the exception of oysters, aquaculture in Australia is relatively recent, but for one of the major success stories of contemporary Australian aquaculture there is an important link with the past. In the 1800s salmonids (trout and salmon) were introduced into New South Wales and Tasmania for the purpose of supporting freshwater sport fisheries (McPhee et al. 2002). While Atlantic salmon did not initially establish populations in Tasmania, a shipment of fertilised eggs from the Gaden Fish Hatchery in New South Wales, from original progeny sourced from Nova Scotia in the 1960s, arrived in Tasmania in approximately 1984 with the aim of attempting to farm the species in sea cages in Tasmanian waters. A government feasibility study had suggested that a viable industry could be established. The industry soon proved a resounding success with the first harvests being obtained in 1986–87. From a standing start the Atlantic salmon industry in Tasmania has grown to be one of the largest seafood production sectors in Australia and a ubiquitous and easily recognisable seafood line in restaurants, supermarkets and fish markets. The wholesale value of the industry is approximately $500 million annually and it is a very large economic activity in the state of Tasmania.

Production and consumption: facts and figures The Australian Bureau of Resource Economics and Sciences (ABARES), with funding from the Commonwealth Fisheries Research and Development Corporation (FRDC), publishes the annual Australian Fisheries and Aquaculture Statistics. The report provides important information not only on seafood production, but also on how much is exported, how much is consumed in Australia, and how much seafood is imported. The annual reports provide an important time series of national statistics upon which to assess trends over time. The figures below are largely drawn from the 2014 report (Stephan and Hobsbawn 2014), which presents production volumes and production values for the 2012–13 financial year. In 2012–13 the total value of Australia’s fisheries production was $2.38 billion, which consisted of $1.38 billion from the wild capture fishery and $1 billion from aquaculture.18

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Table 18.1.  The top ten species or species group by value ($ million) produced in 2012–13 Rank

Product

1

Salmonids20

Value ($ million) 496

Aquaculture or wild caught Aquaculture

2

Rock lobster

450

Wild caught

3

Prawns

217

Wild caught

4

Abalone

166

Wild caught

5

Southern bluefin tuna

153

Wild caught/aquaculture

6

Edible oyster

94

Aquaculture

7

Prawns

60

Aquaculture

8

Crab

53

Wild caught

9

Barramundi

32

Aquaculture

10

Shark

26

Wild caught

Source: Stephan and Hobsbawn (2014).

Tables 18.1 and 18.2 present the top ten species19 (or species group) by value and volume respectively. The success of the Tasmanian salmon industry is clearly evident as salmonids, predominantly Atlantic salmon produced in Tasmania, lead in terms of both volume and value. Salmonids account for ~21% of the total value of fisheries and aquaculture production. Australia’s consumption of seafood increased at an average annual rate of 3% between 2000–01 and 2012–13, from 248 515 t to 345 326 t, reaching 15 kg per person in 2012–13. This increase can in part be contributed to the recognition of the health benefits of seafood as a lean source of protein that is high in omega-3 oils, as well as other vitamins and minerals. Seafood has been promoted on the basis that at least two to three serves of seafood each week can confer significant health advantages (McManus et al. 2010). In terms of live weight (not to be confused with the estimate given above),23 Australians consumed 22.2 kg/ capita/year of seafood in the years 2001–03. This is above the global average of 16.4 kg/ capita/year (Ridge Partners 2010). For comparison, Japan consumed 66.9  kg/capita/year and Norway 49.5 kg/capita/year, while in India consumption was only 4.0 kg/capita/year for the same period. Table 18.2.  The top ten species or species group by volume (tonnes) produced in 2012–13 Rank

Product

1

Salmonids

Volume (t) 41 762

Aquaculture or wild caught Aquaculture

2

Australian sardines21

38 437

Wild caught

3

Prawns

17 403

Wild caught

4

Oysters

12 530

Aquaculture

5

Rock lobster

10 549

Wild caught

6

Tuna

7 8

8089

Wild caught/aquaculture22

Scallop

6750

Wild caught

Shark

5720

Wild caught

9

Mullet

4722

Wild caught

10

Crab

4634

Wild caught

Source: Stephan and Hobsbawn (2014).

18 – Australian fisheries production

Exports Australian fisheries export a range of high unit value seafood products, with export earnings accounting for 49% of the total production value in 2012–13. However, in global terms Australia is a minor player, producing less than 0.2% of global seafood supply. Japan was the major export destination for Australian seafood products until 2004–05. Since then exports of Australia’s seafood products to Japan have declined and Australian seafood exports have shifted towards Hong Kong, China and Vietnam. In 2012–13 the value of exports to the key destinations were: Hong Kong $371 million, Vietnam $294 million, Japan $269 million, China $48 million, and the United States $39 million. Over the last decade and a half, the real value of Australian fisheries product exports dropped by 51% ($1.2 billion). Most of the decline in value occurred in the first half of the decade, a period in which the Australian dollar appreciated strongly. Between 2004–05 and 2012–13 the real value of Australian fisheries product exports continued to decline, but at a slower pace. In 2012–13 imports accounted for 66% of Australia’s total seafood consumption. Australia exports much of its high value products (e.g. rock lobster, southern bluefin tuna and abalone), while importing a high volume of product that occupies the cheaper end of the product range – for example, skinned fillets of ‘basa’, a type of catfish farmed principally in Vietnam, retailed for as little as $6 per kilo in supermarkets in 2015. Compare this to Australian-caught barramundi, which at the same time sold at $43 per kilo. The major single product imported is canned tuna – a supermarket staple. The importation of such a large volume of seafood for domestic consumption causes concerns for the domestic seafood industry. However, Australian-caught tuna is sent to Thailand for processing and canning to return to supermarket shelves in Australia. Certain finfish are likewise exported to be scaled, gutted and filleted before making their way back to Australia as frozen product. The main countries that Australia imports seafood from are Thailand (canned tuna and farmed prawns); China (farmed prawns, squid, and scallops); and New Zealand (mussels and various finfish species). By way of comparison, the United States in 2007 imported 84% of its seafood demand (Ridge Partners 2010). Seafood imports are influenced by exchange rates, with a high value for the Australian dollar making imports cheaper for domestic consumers, and dampening demand overseas for Australian seafood. The export of high value product gives rise to the notion that the seafood industry is extracting ‘natural capital’ and exporting it to overseas consumers without concern for the domestic consumer. However, Australia cannot sustainably produce enough seafood to meet its domestic demand, even if all seafood produced were to be consumed domestically. The importation of seafood allows access to cheaper seafood (e.g. basa) for the more budget-conscious consumer, and also diversifies the already diverse product range. In the absence of cheap imported seafood, some consumers would not eat any seafood. In terms of the volume exported, any primary industry will seek to find the highest price that can be reliably obtained for the volume produced. We live in a global economy and seafood is part of the economy – Australian-harvested seafood will continue to be exported and sold domestically, with imports playing a key role in making up the shortfall.

The future While predictions are always fraught, an overall trajectory for seafood production and consumption in Australia can be mapped out, as can several factors that influence it. Given

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the low productivity of the Australian marine environment, there is limited opportunity to increase substantially and sustainably the volume of the wild catch. However, some resources that are captured as by-catch, but are not currently utilised, could come to be retained for human consumption. There is historic precedence for this. Moreton Bay bugs (Thenus spp.) were once discarded as being worthless, but are now a high-value menu item, as illustrated in the G20 menu (Box 2.1). There has been a shift in the use of Australian sardines for human consumption as opposed to bait for recreational fishing, and this trend may continue, particularly as it is an example of a fish species high in good oils and thus important for health. There is likely to be continued growth in aquaculture production as a result of improvements in husbandry techniques and the development of new farms, with the Northern Territory a likely region. While opportunities for new farming ventures exist, they are somewhat limited in New South Wales and Queensland due to a lack of suitable sites and community opposition in concert with the need for extremely high environmental standards, particularly in or near the Great Barrier Reef Marine Park. The expanding economy of China in particular, with its growing middle class, is likely to see an increase in demand for Australian seafood. Culturally, seafood is a ‘must’ for Chinese New Year, and Australia produces some of the products highly desired at that time – rock lobster, prawns and coral trout (Plectropomus spp). The proposed China–Australia Free Trade Agreement (CHAFTA) is likely to strengthen demand. While India has low per capita seafood consumption, the very large population together with a substantial growth in the middle class suggests that additional export markets may arise there. In all cases, exports will continue to be influenced by exchange rates. As more Australian fisheries seek environmental certification and eco-labelling (for example, by the Marine Stewardship Council), this should enhance export opportunities into the European Union and elsewhere where such requirements are necessary, but to what extent is uncertain. The European Union is the major importer of seafood, more than double the amount going to the United States or Japan. Key European markets include Spain, France, Italy, Germany, the United Kingdom, Belgium, Denmark, Sweden, the Netherlands and Portugal (Ridge Partners 2010). Domestic production of seafood in the European Union is under pressure through overfishing and reduction in catch quotas, and these quotas are likely to be further reduced over time. Domestically, seafood consumption per capita and in total is projected to continue to rise from an estimated 17 kg/capita/year in 2020 to 25 kg/capita/year in 2050 (Kearney et al. 2003). These figures may be conservative. This projected increase in per capita seafood consumption is coupled with a projected increase in population. Australia has an ageing population, and seafood in the diet is recognised as being important for optimal health outcomes in seniors, including positively addressing aged-related conditions such as coronary heart disease, stroke, arthritis and bowel cancer (McManus et al. 2010). An increase in imports and domestically grown aquaculture product are most likely necessary to fill this increased demand. However, the recognition by consumers of the importance of ‘food provenance’ will also potentially increase desire for local product, and consumers are often willing to pay a premium for high-quality local products, as evidenced by the rapid growth of farmers’ markets in major cities (Ridge Partners 2010). This may improve the profitability of several small-scale Australian fisheries that are adjacent to large population centres, and may also see some product that is currently being exported retained for the domestic market. The latter can be a buffer for seafood-producing businesses when the value of the Australian dollar is high.

18 – Australian fisheries production

Food provenance only works effectively with appropriate regional branding and promotion. Historically, inaccuracies and inconsistencies in fish names (deliberate or accidental) and passing off imported product as local have muddied the waters for the seafood consumer at the point of sale. However, the development and application of a standard for the naming of seafood sold in Australia and the ongoing implementation of country-oforigin labelling will address these issues. Further work will need to be done to ensure that fish being marketed and sold as local are in fact local and not sourced elsewhere.

Conclusion Australian seafood production makes an important contribution to the nation’s food security and also generates important export earnings. The production of Atlantic salmon in Tasmania has grown rapidly and it now represents Australia’s most important seafood product, although overall a diverse range of products contribute to a multitude of seafood options for consumers. Per capita and overall demand for seafood consumption has been increasing and will most likely continue to increase, with the health benefits of seafood in a diet now well established – particularly (but not exclusively) for an ageing population. Australia’s wild catch yield is constrained by a lack of relevant freshwater resources and a marine environment that although large is relatively unproductive. Future growth in domestic aquaculture production is likely to make a significant contribution to meeting seafood demand, although additional imports will also be required. Australia will increasingly export more seafood to China and other potential destinations, including the European Union.

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19

Milking the cow T. Hundloe

She’s milking in the rain and dark, As did her mother in the past. The daybreak haunts the dreary scene, The brooding ridge, the blue-grey bush, The ‘yard’ where all her years have been, Is ankle-deep in dung and slush. from Henry Lawson, ‘A Bush Girl’

Introduction Dairy farming is one of the oldest Australian industries. Today it ranks third of the nation’s rural industries, with a gross value of production of milk at the farm gate at $4.73 billion in 2013–14 (ABS 2015). Notwithstanding this domestic dominance, on a world scale Australia is a minor export player in milk and milk products, supplying in the order of 2% of the milk exported globally and 8% of dairy products. Yet from an Australian perspective our exports are significant. In one form or the other, Australia exports more than half the milk produced in its dairies. Export earnings for dairy products were $2.7 billion in 2013– 14 (ABARES 2014). Most of Australia’s dairy-farms are in Victoria, with the majority of the rest spread north along the east coast as far north as the Atherton Tableland and south to Hobart. There is a cluster of farms in the bottom of Western Australia. See Fig. 19.1 for the distribution of dairy farms in Australia. The total herd fluctuates around 2.5–2.8 million head, of which 1.5–1.7 million are ‘milkers’, in milk not ‘dry’. Three-quarters of these dairy cattle obtain their sustenance from grazing on pastures and have to be given supplementary food only in drought conditions. Hay, grains and silage are the additional food sources.

The dairy of old The first settlers, convicts and their guards, required milk and butter. Native vegetation around the penal settlements was cleared, with large trees ring-barked and burnt where they fell. Exotic grasses were introduced. The first cows had been brought from the Chan211

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Fig. 19.1.  Distribution of dairy cattle in Australia in 2006.

nel Isles, Jersey and Guernsey. (Fig. 19.2 shows jersey poddy calves.) They were not used to Australian grasses. Farms were very small, and a small herd of milking cows produced ample surplus milk to sell. Some farmers made butter not just for personal consumption but also to sell in nearby town markets. The early farms became family farms passed from generation to generation. The number of cows increased, but two, three or four dozen were common herd sizes from after the Second World War until the 1970s. Of all types of farming, dairy-farming was the most demanding when there was no employed labour. This remained the case until two generations ago. The herd was limited to what a family could milk. Cows are normally milked twice a day, before breakfast and mid-afternoon, times that allowed the family children to play a role. Small herds were milked by hand as recently as the Second World War. When diesel-driven ‘milking machines’ were introduced, and spread throughout the industry, school-age children would have the task of ‘stripping’ the remaining milk, that which the machines had not extracted. Other tasks for the youngsters included hosing out the cow dung. This was done bare-footed. Footwear other than good quality rubber knee-high gumboots would last only a fortnight before they rotted away, and such quality boots were too expensive for most dairy farmers. For youngsters the best job was to join Dad on a horse to check out the far paddock (see Fig. 19.3). The family dairy-farmer never had a holiday. Even Christmas Day celebrations were confined to a lunch-time meal. The after-meal nap was over at 3 p.m. The leader of the herd, many of whom were called ‘Blondie’ (they were the yellow-coloured Channel Isle breeds), would have led the other milkers to ‘the yard’. This was a fenced area in which cows waited before being baled in the milking stations, leg-roped and milked. If the farm sold cream rather than milk, the separator, a machine that did what its name suggested

19 – Milking the cow

Fig. 19.2.  Jersey poddy calves on Dick Schroeder’s farm being admired by Tor Hundloe, Keeley Hartzer, Daisy Goodwin and Amylee Quirk.

Fig. 19.3.  The author, aged six, with his father on the Numinbah dairy farm known as ‘Rosins’.

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using simple principles of physics, produced ‘separated milk’ and cream. The separated milk would be carried in four-gallon cans to the pigsty where, with a little molasses added for sweetening, it was fed to the handful of pigs kept for a supplementary source of farm income. If a few hundred poultry were part of the mix of the farm animals, all having to justify their food, some of the separated milk was kept to moisten ‘laying mash’, or ‘growing mash’ if chickens were being fed. Enough laying hens and the family income from cream and pigs were supplemented by cartons of eggs supplied to the grocery shops in the nearby towns.

The modern dairy In recent years the Australian dairy industry has undergone dramatic changes, none more evident than a reduction from 22 000 farms in 1980 to 7000 in 2010. The average farm in 1980 ran 85 head, while today the average is 230 cows. In the order of 11% of farms produce one-third of the nation’s milk. The average herd of one of these larger farms is over 500 head; some very large farms run over 1000 cows. A sizeable percentage of the large farms are owned by corporations. Dairy is one agricultural pursuit where foreign ownership, even if only threatened, makes headlines. Many Australian city-dwellers can trace their family links back to a dairy farm. There are examples where some of the family remains in dairying, but nevertheless there is a collective sense of loss when a foreign corporation buys a dairy farm. And that they are doing. Obviously, there are significant economies of scale in modern dairying, and the burden for school-age sons and daughters of dairy-farmers is removed as employed farmhands do the work once undertaken by the youngsters, overseen by an employed farm manager. Various types of innovations have taken hold, if only by a few farmers to date, such as robotic milking. The next innovation is likely to be housed cows. Instead of the milking herd grazing across the fields they will be kept in enormous ‘barns’ and fed. This will be a radical step in Australia. In the cold parts of Europe, farmers keep their herds, very small by Australian standards, in barns throughout the year. A cow that is housed and fed is not spending energy on walking paddocks to graze. More milk is produced. This could be the future of Australian milk production – no longer paddocks for grazing, rather cultivated fields producing food for the barn-fed cows. One can anticipate the likelihood of significantly increased cropping in Australia.

The value of production and exports The $2.7 billion worth of dairy exports comprises mainly processed product, not fresh bottled milk. This is likely to change as demand for top quality, safe products takes hold in the wealthier parts of Asia. ABARES economists (Linehan et al. 2012) forecast a doubling of the value of dairy products demanded globally by 2050, and suggest Australian earnings will likewise double. Demand from China will be the main driver. Of course, a doubling of the value of milk products does not mean that there will be a doubling of production. With completely inelastic supply, price could double with a shift in demand. However, an increase in supply at a global level must be expected. Australia will be one of many countries competing in the expanding market. Significant sustained price increases will guarantee that. In sum, both increased demand and increased supply can be expected.

19 – Milking the cow

The future What is the likely response in Australia to the increased demand? As noted, the first thing to consider is that we face some serious competitors, on both volume and cost. They include New Zealand, the European Union and Eastern Europe. Our geographical advantage (even if only marginally closer than New Zealand) will benefit us if fresh milk is sold into China, transported by plane. Australia produces some excellent cheeses, yet struggles to compete on ‘national branding’ with the Danes and Norwegians. Australian milk chocolates are also very good, but in this case the competition is from the famous Swiss brands. Manufacturing milk products is something Australia is good at. Long-lasting milk, a must for Australians who undertake camping holidays in remote locations, has been exported for a considerable time; so has powdered milk. We would expect these products to retain their appeal. The seriously health-conscious consumer willing to pay a premium should be able to import organic milk from Australia as this part of the industry continues to grow. An example of a changing industry is provided by Mary Valley (Queensland) dairyfarmer Dick Schroeder. He runs two herds of jerseys, 365 on a conventional farm and 65 on an organic farm. Not only does he farm; he also processes milk and sells it as pasteurised or organic, but not homogenised, under his brand ‘Cooloola Milk’. In general, there must be considerable potential to make serious moves into the Asian market selling a range of dairy products. Brand recognition is likely to be a key to success. Let Chinese mother Chen Li make the point: ‘We can’t trust milk in China’. She therefore seeks ‘clean, green and safe’ milk products from Australia (The Weekend Australian, 14–15 November 2015).

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20

Wool, lamb and mutton T. Hundloe

Introduction Australia’s vast area of low rainfall plains, suitable climate and grasses both abundant and miserable determined that the merino would come to be the dominant introduced animal. Banjo Paterson had an eye for landscapes. Here is his summation of the nation’s agricultural attributes in his ‘Uplift at “Illalong”’, one of his many pieces of prose: Look at a map of Australia and you see a coastal belt of rich country running right up from the south of Victoria, where the seals and penguins are, past the market gardens of Drysdale and Geelong, where the air is heavy with the odour of onions, past the cow milking districts of Dapto and Illawarra and the dairy farms of the north coast. Then onto Queensland, where there are more dairy farms and pigs and poultry, and finally we come to the far north, where they grow mangoes and guavas, and bananas and pineapples and lately have made a start with tobacco. All this coastal belt is too rich and too well-watered for sheep; also the land is too expensive. The sheep, with his usual perversity, does not thrive on green grass and running water. He is best out in the western plains …in a temperature of a hundred and ten, and gets his water out of a saddle-coloured tank. The sheep does everything differently from any other animal, and he will get a living on dry herbage, and seeds picked up on a dirt floor, while he will die of worms and fluke in grass up to his knees. Quoted in Baglin (1985, p. 152).

Sheep were to feature in Paterson’s poetry. He wrote Australia’s informal national anthem while visiting Dagworth, a sheep station in central Queensland. Down came a jumbuck to drink at the billabong; Up jumped the swagman and grabbed him with glee. And he sang as he shoved that jumbuck in his tucker bag, You’ll come a-waltzing Matilda with me. A. B. Paterson, ‘Waltzing Matilda’, 2nd verse

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In the beginning In 1792, the colonial governor of New South Wales, Arthur Phillip, completed his term. This was nearly five years from the arrival of the First Fleet. At that stage 4878 adults plus 65 children had arrived in the colony as convicts. The following is a report on the state of agriculture: There were 1703 acres in cultivation, with 1186 acres in maize and 208 in wheat, the remainder mainly garden crops. The stock of farm animals consisted of: three bulls, two bull-calves, 15 cows, three calves, five stallions, six mares, one hundred and five sheep, and 43 pigs (as reported by Britton 2012). Each married settler was given one ewe for the purpose of breeding. The sheep were mainly for meat. Their fleeces were coarse and not well suited for clothing. In 1794, John Macarthur purchased 65 ewes and lambs from Calcutta (Kolkata). He next imported two Irish ewes and a young ram. He crossed the Indian and Irish sheep with the result being a finer wool than the coarse Indian wool. Macarthur stated that this experiment ‘originated the idea of producing fine wool in New South Wales’ (quoted in Onslow 2014). In 1796, he bought 20 wool-bearing merino sheep from the Cape of Good Hope, in South Africa. Macarthur kept four ewes and two rams for himself, distributing the remainder of the merinos to other settlers. Following the success of breeding pure merinos, he purchased another 1200 of the ‘Cape breed’ merino (as he referred to them). In 1801, Macarthur took specimens of pure merino wool to England, plus some good quality cross-bred wool. The English were impressed. Macarthur wrote they considered the ‘Merino Wool was equal to any Spanish wool’ (quoted in Onslow 2014); ‘Thus encouraged I purchased Nine Rams and a Ewe from the Royal Flock at Kew, and returned to this country determined to devote my attention to the improvement of the Wool of my flocks’. In 1804 Macarthur asked (‘petitioned’) for land to be granted by the British Government. His request was met. Initially he got 100 acres (40 ha) near modern Parramatta. This was cleared by convicts assigned to him. As a reward for ‘improving’ the land he was given another 100 acres. We are not told what the convicts got as a reward.

The merino The brief history above is the genesis of the Australian fine-wool industry. Australia was to become the world leader and remains so to this very day. Australia produces over 50% of the world’s fine wool. All the fine wool is merino. Where Macarthur out-performed the other pioneer graziers in the colony was by concentrating on breeding merinos and selecting merino flocks from various locations around the world. This was smart selective breeding aimed at overcoming the in-breeding which would have resulted from using the few sheep available in Australia. Wool yields increased, and spectacularly. The original merinos brought to Australia cut a fleece of ~1.5–2 kg, while today fleeces three times that weight are expected and up to 10 kg is not uncommon. To be successful the sheep had to be suited to the climate, or more appropriately the Australian climates. As the opening quote from Banjo Paterson makes clear, Australia’s wool industry was destined for the dry, harsh country. The merinos that came from grazing the dry plains of Spain suited Australian conditions.

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Crossbreds, comebacks and dorpers The story of Australian sheep and wool is not only about merinos, even though they account for three-quarters of the flock. In the order of 12% of the nation’s sheep are firstcross ewes, in the main merino-Border Leicester crosses. These ewes are mated with British meat-breed rams to produce high quality prime lambs. Another 9% are merino-derived dual-purpose breeds (wool and meat) and comebacks. Comebacks produce wool only marginally stronger than the strong-wool merinos (see below) but are more suitable for the meat trade than pure merinos. The remaining sheep are an assortment of British sheep with coarse, long wool, such as Border Leicesters, Romney Marsh and Cheviots, and the short-wool breeds such as Poll Dorset, Dorset Horn, Suffolk, Southdown, and South Suffolk that are used for producing prime lambs. In the mid 1990s, dorper sheep were introduced to Australia. These were sheep from the arid parts of South Africa where they were first bred in the 1930s. Suitable for a range of climatic zones, discarding their fleeces in summer (hence not requiring shearing or only minimal shearing) and being resistant to flystrike ( meaning no mulesing, crutching or drenching), they have become very popular meat sheep in Australia. The merino sheep comes in different body sizes and wool fineness. It is usual to divide the merino into four classes based on wool fibre fineness. Top in terms of quality and price is the ‘super-fine’ fleece. This is now defined as ‘18 micron fibre diameter or less’ (in earlier terminology this wool would have been classified as ‘84 to 90’ crimps per inch). Next comes fine wool at 19 micron fibre diameter (or 70 to 74 crimps), followed by medium wool at 20 to 22 micron fibre diameter (64 crimps) and finally strong wool at 23 to 25 micron fibre diameter (58 to 60 crimps). The fine wool sheep are best suited to cooler areas, the Midlands of central Tasmania, the Yass/Goulbourn area in southern New South Wales, the New England area of northern New South Wales and the Stanthorpe area of Queensland. In these areas improved pastures allow for intensive grazing. The stronger wool fibre sheep, usually bigger framed, are suited to the hot, low rainfall areas, as found in South Australia. In Queensland, western New South Wales and Western Australia, the fleeces are medium to strong.

Of wool and meat and the market Sheep are not just for wool. In the early days some were bred for meat, and continue to be today. Older sheep meat is sold as mutton. At the end of its life, the plight of a wool-producing sheep is to be served as mutton. Lamb is the preferred sheep meat if there is choice. It is important to illustrate that farmers cannot hide from is the market. In the 1830s and 1840s, sheep were being sold from as little as three shillings each to a high of three pounds each, a twenty-fold difference. Rational decision-making by Australia sheep farmers was not possible in these circumstances. Droughts and floods are far less dangerous than market forces. The market was to come to play a dramatic role in the changed fortunes of the Australian wool industry in the late 1960s to early 1970s. If the market was not a problem, the weather was, and if the weather was not a problem the grazier himself was. The past tense suggests trials and tribulations in building what was to become Australia’s major export industry, a position wool held until the end of the 1960s. The three influences (markets, weather and the farmer) were in combination capable of doing both much good and much damage. The latter was, and is, the concern. Doing good

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requires no remedial action. The damage was overstocking that destroyed nature’s ability to feed the animals and sent many a pastoralist bankrupt. Take notice of one of this nation’s famous sons, for the third time in this chapter. AB (Banjo) Paterson covered much country in his travels, seeking to understand the bush and the people who worked it. He came to believe that overstocking would occur. Overstocking in a land as large as Australia was not something thought possible, and this also was Paterson’s first impression: ‘Travelling through a station of a hundred thousand sheep, one hardly sees any of them’ (Baglin 1985, pp. 75–6). How was it that such a big country where you couldn’t see the sheep in the grass could come to be overstocked! Come long-lasting droughts and the evidence was stark. As grass and shrubs died and the white bones lay exposed on the cracked soil of ditches that had held water when the rains had come, the story unfolded season on season. For Paterson, the sheep/wool business was the lottery that drew and often repelled folk to and from the Australian outback: ‘This possibility of being ruined or enriched every year provides enough excitement for most people’ (Baglin 1985, p. 152). It was a lottery worth a ticket if the expansion of the wool industry in the mid to late 1800s is any guide. By mid 1800s there were 39 sheep for every Australian. The country was large. New graziers and those seeking to extend their flocks kept moving further and further west and north into the vast grass-land plains, and when these lands were taken, into the mulga and then the gidgee scrub, and always there seemed to be more land further away on which a sheep could manage to stay alive. When the rains came, and they do occasionally come to the Australian ‘red centre’ and the Channel Country becomes a lake beyond measure, standing on its banks the graziers rejoiced in their wisdom. They had won the lottery. The next, inevitable, drought saw them regain perspective. Many by then had overstocked. Consider the property Commonwealth Hill in the Woomera Prohibited Area of South Australia. It is just over 500 km north-west of Port Augusta. The station was originally one million ha. At its peak, the station ran 84  200 sheep at one every 12.5 ha. It runs fewer now. But how could such near-desert country achieve this? There are claypans, sand hills, mulga scrub, saltbush, bluebush and witchetty bushes. The answer is what these pastoralists call ‘liquid gold’. Too far from the Great Artesian Basin, the source of bore water had to be shallow aquifers. Today on Commonwealth Hill there are 46 bores, 14 dams, 58 tanks and 205 km of water pipes, all underground (Outback, December/January 2015). Many decades after Banjo Paterson had speculated about the prospect of overstocking, scientists working on grazing on drylands felt they needed to make the following obvious points: ‘Clearly there are only two ways to overcome or prevent the problem of overstocking; either stock have to be reduced or the supply of forage has to be increased … Graziers overgraze land for a number of reasons. Economic pressures force some to overgraze their land to maximise income to survive, some overgraze out of ignorance of effects on current and future productivity, while some are greedy. The most convincing argument for a lower stocking rates is likely to be one showing that a reduction in stocking rate results in increased profits’ (Gardener et al. 1990, p. 284). Nature determines the appropriate stocking. Here is an example from a station we have encountered previously. Until it was subdivided, the property ‘Thylungra’ in the Quilpie region was one of the largest wool stations in the world. In 1972 it ran 60 000 sheep. The drought that year saw its stock reduced to 5500 (Queensland Government Environmental Protection Agency 2002). This is the scale of drought-induced de-stocking.

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How things have changed We have discussed in previous chapters the changeover from wool production to beef production and the consequent dramatic decrease in sheep numbers in Australia. This is purely the result of market forces, specifically the comparison in profit between running sheep and running cattle. In the late 1960s, the use of synthetic fibres for manufacturing apparel started to hurt the wool industry. Prices for wool fell. The Australian Government made a vain attempt to prop up the price of wool by purchasing all the wool that did not sell at auction for a determined reserve price. A mammoth stockpile resulted by the early 1990s. There were no buyers at the designated price. The ability to shift from sheep to cattle was the economic saviour of much of Australia’s pastoral lands. Cattle were not the only solution. On the top quality sheep land, the black soil country, fields were ploughed and wheat or other grains were grown. The conversion of the land from sheep to cattle required no significant work on the station. From sheep to grain, machinery had to be bought, leased or borrowed to plough and otherwise ready the land. However, this was not a dramatic change and was only costly if machinery was purchased. Today the total flock of sheep is in the order of 75 million sheep, roughly three sheep per Australian (Fig. 20.1). In 1971, it was 10 sheep per human. Much else has changed. In the earlier days of the industry, sheep were washed in creeks (if they existed on the property) before shearing. In the dusty outback a fleece with a healthy load of lanolin will acquire considerable dust, glued to it by the grease. Then there is a variety of vegetable matter that can get caught in the fleece, some so hard to remove that only by ‘carbonising’ (burning the seeds and burrs at the processing stage) can these be removed. The

National sheep and lamb flock numbers as at June 2013 75.5 million head

Queensland 2.9 million

WA 15.5 million SA 10.8 million

NSW 27.8 million Victoria 16.1 million

Source: ABS (final estimates 2013)

Tasmania 2.4 million

Fig. 20.1.  Sheep numbers by state. Source: Meat and Livestock Australia.

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Springsure–Clermont area of central Queensland became cursed with spear grass, which is one of the most damaging and difficult to remove seeds. It can work its way down the wool fibre and then embed itself in the flesh of the sheep. Mindful that wool shorn in the centre of Australia was destined for the United Kingdom then in more recent years Japan and China, removing weighty non-valuable material from the fleece made economic sense. Hence, wool scours were established in outback towns if there was an adequate water supply. Scoured wool could be up to 30% lighter. However, wool grown on well-grassed improved pastures accumulated little dust or vegetable matter and there was no incentive to scour wool before transporting. The outback scours are all gone today, one or two surviving in dereliction as tourist attractions. And so are the woollen mills. Each capital city had its mills, as did major regional cities in woolgrowing areas. Today it is cheaper to export dust to China and have the Chinese wash it out of the wool than to do it here. Think in terms of ‘fibre miles’: a woollen jumper purchased in Sydney is likely to have commenced its journey from a property near Yass, been shipped from Sydney to a port in China and (if of superior quality wool) sent to Italy for manufacture. Only one large wool scour operates today, in Geelong.

Meeting the challenge As a natural fibre wool takes some beating. Certainly it made good military uniforms for soldiers in the cold Korean battlefields in the early 1950s when war raged in that country. It has been asserted that Australian wool clothed both sides, notwithstanding the prohibition of trading with ‘Red’ China. Who knows where Australian wool went after it reached a Japanese port, as much did? In the 1960s, Australian Army cadets were outfitted in heavy woollen ‘clobber’ and required to wear it even if the temperature soared towards 40 degrees. These days armies clothe their forces in super-synthetics; about the only thing they can’t do is repel bullets. Wool can absorb near one-third of its weight in water before it becomes saturated. It makes warm blankets. A woollen jumper is the garment of choice for cold-climate farmers, fishers and fashion-conscious townspeople. Then there are the rich folk who are willing and able to pay a small fortune to be seen in a superbly cut wool outfit. Go to Italy to see these made. Visit the colder-climate wool-growing regions of Australia to discover the sheep from which this special wool is shorn. Next visit a grazing property and walk through the shearing shed to smell the lanolin. Figure 20.2 is a typical small shearing shed west of Stanthorpe on the Darling Downs, in which the author once worked. A novel and extremely profitable innovation for graziers growing top-of-the-market superfine wool is to put a jacket on each sheep. This what Clive and Margaret Smith do on their traprock (basalt) property ‘Mulgowan’, just north of the NSW border at Amiens, south of Stanthorpe (see Fig. 20.3). In 2009, the Smiths won the Ultimate Clip Competition, the first time Queensland graziers had taken out this prize. Their flock produces superfine wool, in the 15 to 17 micron range, and because the sheep are coated there is no dust or vegetable matter in the wool. The sheep are ‘paddock-grown’ with the only food supplement being nutrition blocks spread around the paddocks. Their wool goes to Italy to become very expensive suits and garments. There are other wool competitions. For example, there is the Vitale Barberis Canonica Wool Excellence Award. In January 2015, the Hawksford family of the property ‘Kentucky’ just south of Armidale in the New England district took this one out. Their wool is also in

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Fig. 20.2.  Shearing shed west of Stanthorpe on the Darling Downs.

the superfine category at 14 to 17.5 microns. Andrew Hawksford is reported as saying that it took 25 years to get his flock to a prize-winning standard. The property runs 4200 head and produces 8000 kg of superfine wool per season. The New England area has a cool climate and good rainfall for grazing. In 2014, the fall on ‘Kentucky’ was 640 mm. In addition to the good quality pasture, the sheep are fed corn mixed with a powder supplement to aid digestion (The Land, 8 January 2015).

Fig. 20.3.  Coats on sheep.

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These two examples are a very small part of the Australian wool industry. It is not feasible to put jackets on a flock of 50 000 sheep that roam over vast distances, collecting red dust as they search for the next grass shoot. Most Australian sheep are grazed in poor country. Most grow wool that is medium to strong, not the high-price fleeces that the Italians pay big money for. Most Australian wool, with its entangled burrs and grass seeds and fine dust attached by the natural lanolin of wool, finds its way to China were the valueadding takes place. Australians are likely to purchase woollen goods that in ‘wool miles’ have travelled from west of Longreach to the port of Brisbane, to one of several ports in China, off to a woollen mill in that country and then back to Brisbane. The Australian clothing manufacturer Driza-Bone purchases fine wool (17 to 18 microns) to make next-to-the-skin garments. The wool is shipped to Italy for initial processing, the yarn is made in Switzerland, and the garments are assembled in Vietnam (if they are for the Australian market) or the Czech Republic (if for the European market). The company is contemplating using organic wool (otherwise known as ‘eco-wool’). Much of the country’s native pastures have never been sprayed with superphosphates or synthetic chemicals, and weed infestations are not an issue. As organic wool is sold for a premium of between 10 and 23% (Outback, August/September 2008), expect more organic wool in the future.

Lamb curry and whatever else takes your fancy Notwithstanding Australian food traditions which includes the Sunday lamb roast, Australians are now eating considerably less lamb, and very little mutton, compared to previous generations (see Box 20.1). And so is the case for New Zealanders, South Americans, Europeans and people in the United States. On the other hand, lamb and mutton remain the principal source of animal protein for households in India, the Middle East, North Africa and parts of Europe. Given that Australia and New Zealand are the world’s main exporters of lamb, mutton, and live sheep (the latter into the Middle East), the strength of demand in these regions plus a growth in demand in China means that these two exporting countries will continue to dominate world trade in sheep meat. It pays to be reminded that we were not that fussed about what we ate two to three generations ago. In 1947, an English professor wrote in the London Spectator after a visit to

Box 20.1: Mutton Then there is mutton! And ‘square’ meals. Take this one, on the menu of a Queensland Railway dining room (in the era when trains had ‘guards’, steam was their source of energy and stops at country towns where of a duration such that a beer or two could be swilled, or a cup of tea and a piece of pavlova consumed if the that was your choice): Mutton broth, and Roast mutton, or Boiled mutton, or Mutton pie with – mashed potatoes and – college pudding, preserves and – tea, coffee (instant)

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Australia: ‘a great country rightly proud of its achievements in plant and animal genetics, should devote a little research into the cooking of a potato, and cooking meat without hiding the burnt offering under a horrible congealing axle-grease gravy’ (Quoted in Jupp 2001, p. 33). To be reminded of the era of steam trains, ‘proper’ railway stations and the typical menu in sheep country see Box 20.1. In 2012, Australia exported 44% of the lamb it produced and 80% of its mutton, while New Zealand exported 80% of its lamb and 84% of its mutton. In reporting these data, Professor Gary Brester, of the Department of Agricultural Economics at Montana State University, went on to make the point that these two countries have a competitive advantage due to their low production costs and high quality meat. Economies of scale (large properties and few workers) are major reasons for the low cost of production. Australia is the world’s major exporter of live sheep, as it is for live cattle.The destination of the sheep is the Middle East where Islamic (halal) food requirements prevail. In 2012–13, approximately 2 million sheep were exported, the largest number from Western Australia (in the order of 1.7 million) for a sum of near $200 million. For perspective, in the same year about 600 000 live cattle went overseas for earnings of near $600 million. Live export of sheep is controversial, as it is for cattle, and every now and then an example of maltreatment on the journey or at the destination makes headlines and the export trade can be impacted. For this and other (economic) reasons the numbers exported fluctuate considerably. There are reasons for optimism. Through selective breeding there has been a dramatic increase in meat per sheep over the past 50 years, and this means that even with the massively reduced national flocks in both Australia and New Zealand (which has had a 50% reduction) the industry remains very strong. Even better news is that demand is outstripping supply and hence prices are increasing. A significant advantage for Australia is the ability to switch from sheep to cattle and back again in response to market prices. Just as Clancy moved on from shearing sheep to droving cattle, so can Australian pastoralists change the animals they graze as circumstances demand. Let Banjo Paterson make the point: He was shearing when I knew him, so I sent the letter to him, Just on spec, addressed as follows, ‘Clancy of the Overflow’. And an answer came directed in a writing unexpected (And I think the same was written with a thumb-nail dipped in tar): ’Twas a shearing mate who wrote it, and verbatim I will quote it: ‘Clancy’s gone to Queensland droving, and we don’t know where he are.’ In my wild erratic fancy visions come to me of Clancy Gone a-droving ‘down the Cooper’ where the Western drovers go; As the stock are slowly stringing, Clancy rides behind them singing, For the drover’s life has pleasures that townsfolk never know. from AB Paterson, ‘Clancy of the Overflow’

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Cotton A. Solakovic

Introduction Cotton is not a source of food for humans, although the cotton seeds that remain after the ginning process become livestock food and we benefit indirectly. However, the extent of cotton cultivation in Australia and the opportunity cost of the land and water utilised in its cultivation mean that cotton can be seen to compete with the production of food. The conventional wisdom is that cotton is ‘a water hungry crop’ and that it takes up land that could grow crops for human consumption. We will explore these relationships below. We use cotton more than any other fibre. The cotton plant (Gossypium) has been used for thousands of years to produce textiles and today cotton is a part of our daily lives. Cotton is grown in 65 countries by 30 million farmers, and 2.5% of farm land is devoted to it.

Cotton is introduced to Australia The colonialists who landed in 1788 brought cotton seed with them. By 1830 three bags of cotton were sent to the United Kingdom, and by 1857 small areas had been planted in Queensland. This was on dry land (rain-fed) plantations. The American Civil War between 1861 and 1865 resulted in the blockade of southern US ports as a means of starving the South of export income. These were the cotton-growing states of the United States, utilising slave labour. During the blockade, the UK mills sought alternative supplies of raw cotton. In Australia, relatively small plantations were established in the Gold Coast area, near modern Surfers Paradise. They were not very successful and the end of the Civil War resulted in the cessation of the experiment on the Gold Coast. In the first half of the 20th century there was cotton being grown on a commercial scale in Queensland, and enough to warrant the establishment in 1926 of the Queensland Cotton Marketing Board. The purpose of a marketing board was to give some level of price control to farmers who otherwise were at the mercy of cartels of powerful manufacturers. However, drought, the lack of expertise and fluctuating world prices resulted in the demise of the Australian industry at this time. What was to be the impetus to the development of a large-scale cotton industry in Australia was the building of major dams. First there was the Keepit dam constructed in 1958 on the Namoi River near Narrabri. Irrigated cotton growing was soon established at Wee 227

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Waa and Narrabri. Also in New South Wales came the Burrendong dam in the Macquarie valley at Warren, and again cotton became a major crop. The Fairbarn dam, near Emerald in central Queensland, was built in 1972 and a cotton industry was established. Cotton had been tried in the Ord River area of Western Australia but production fell due to insects becoming resistant to pesticides, and farming ceased in 1973. In 1976, the Copeton dam was built in the Gwidyr valley at Moree, also in New South Wales, and yet again cotton production followed, while in Queensland cotton production increased with the completion of the Pindari and Glenlyon dams. The cotton-specific dam that could literally drown all the others is the one built for Cubbie Station on the Culgoa River in south-west Queensland. This water storage is capable of harvesting and storing enough water to fill Sydney Harbour. The vagaries of the Australian climate mean that capturing and using this amount of water is not possible year in, year out. For example, in late 2014 only 13 000 ha of cotton was planted on Cubbie Station, not the usual 22  000  ha. In fact, 2014 was a drought year for all the cotton farms sourcing their water from the upper Darling River basin (the Baloone, Macintyre, Gwdir and Namoi rivers). While the drought was doing severe damage in the north, a great deal more cotton was planted in the wetter, southern part of the country south of Dubbo, and production was evened out.

The cotton industry today Australia is one of the world’s main exporters of raw cotton, coming in at number four, with ~90% of its production sent to Asian spinning mills. The United States, India and Uzbekistan are in front as global exporters. Indonesia is Australia’s main market, taking nearly one-third of the annual crop. Japan accounts for one-fifth, followed by South Korea and Thailand taking one-quarter between them; China is the only other important importer. The economic value of cotton exports cannot be ignored. In recent years cotton has ranked as high as number three in agricultural crop exports and number five in terms of rural products exported. As far as production goes, Australia ranks seventh in the world. However, in comparison to the major producers not a large quantity is grown in Australia. China and India combined grow in excess of half the world’s cotton. The United States, Pakistan and Brazil produce more than one-third. Where Australian growers have an advantage is that they obtain very high yields and have some of the lowest costs. Cotton growing and harvesting is a capital-intensive industry in Australia and the large farms result in significant economies of scale. Much of the success of the industry has been a result of targeted research. The Australian Government created the Cotton Research and Development Corporation (CRDC) to work with industry to undertake research to enhance profitability and sustainability. In 2014–15, the 1250 cotton farmers in Australia and the Australian Government invested a total of $24 million into this research organisation. Cotton farmers pay a levy of $2.25 per bale and that is matched by the government. It is claimed that this research funding (which is allocated to independent research organisations and the universities) has, in just the past 10 years, allowed Australian cotton farmers to decrease their insecticide usage by a total of 87% and improve water efficiency on their farms by 40%. The research that has led to these outcomes has been done by CSIRO scientists working through the CRDC. The price a farmer receives for each bale is set by the world market, and this value depends on several factors, such as the state of the world economy, agricultural politics

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(subsidies and trade deals), fashion trends, synthetic fibre prices, weather and natural disasters. Supply and demand in the global cotton market is a complex, ever-moving set of scissor-like graphs. There is also a futures market which allows Australian growers who so choose to sell their cotton for a fixed price for up to three years ahead.

Cotton uses Cotton is a non-allergenic natural fibre that doesn’t irritate sensitive skin; the softness of the fibre makes it a perfect fit for underwear. Cotton fibres are unique as they provide ventilation and keep the body cool in summer while warm in winter, acting as a heat conductor. As well as in clothing, cotton is used in bedding and towels, washers and bath mats, in the house as curtains. A 230 kg bale of cotton will produce any of the following: 215 pairs of jeans, 250 single bed sheets, 1200 shirts, 2100 pairs of briefs, 2000 nappies, 4300 pairs of socks or 680 000 cotton balls. The fibre or lint of cotton is typically woven or knitted into fabrics like velvet, corduroy, velour and flannel. There are some unusual cotton products. We don’t automatically think of cotton fibres used in the creation of products like tents, car tyre cords, fishnets and book bindings. These uses are all due to its durability. Cotton linters are very fine and very short fibres. Linters are usually applied in the engineering of paper (such as bank notes) and as a raw material for plastics. Linters are also largely used to make cotton buds and balls as well as having uses in the medical field. Over half of the weight of unprocessed cotton (before it is ginned) is made up of cotton seed. Commonly the seed is mixed with grains, hay or other products to feed livestock. The seed can be crushed into oil, which is another way of providing a food mix for cattle. These uses are valuable due to cotton’s high energy and nutrients. The oil of cotton seed can be used in several other products, such as soap, margarine, cosmetics, rubber and paint. These uses are due to its water-proofing capabilities and high levels of anti-oxidants (vitamin E) which contribute to a longer shelf-life of products.

Growing cotton In Australia cotton is primarily grown in areas with cracking, self-mulching clay soils, such as are typically found on flood plains. This soil type expands and contracts depending on the quantity of the water held in the clay. Farmers test their soils months before the planting season to check the nutrient levels and determine how much fertiliser is required. The dominant nutrient that is needed is nitrogen, which can be applied in the form of anhydrous ammonia, or in a granular form. Cotton-growing soils also need several other nutrients such as phosphorus, zinc, potassium and sulfur. To avoid the build-up of soil diseases and pests, most cotton farmers will practise crop rotation. This means that, for example, for two years a farmer will grow cotton, followed by sorghum the next year and wheat the year after that, or possibly leave the field free from cultivation for the third season. In all cases weed control is important. The cotton plant is subject to attack by a large range of insects, the common ones in Australia being the heliothis caterpillar, aphids, thrips, mirids and whitefly (de Garis 2013).

A thirst for water Cotton is one of the world’s thirstiest crops, taking ~3000 L of water to produce one shirt. It is estimated that more than 70% of cotton farmed globally is grown using irrigation. This has to be well managed as cotton paddocks are susceptible to water-logging. Fields are

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contoured to ensure good drainage, and ideally the application of water is limited to what is necessary rather than see large amounts drain away; this approach is comparatively recent. Today the normal practice is to laser-level the paddock and plant the cotton on ridges with furrows between. Planting occurs in spring months and harvesting in winter. Cotton is planted earlier in the year in the northern areas (around Emerald). Although cotton consumes large quantities of water, Australia’s cotton industry is considered the most water-efficient, producing ‘more crop per drop’ than any country producing cotton. According to industry reports, Australia is currently at two and a half times the world’s average yield in terms of litres per crop and has achieved a 40% increase in productivity of water over the past 10 years (de Garis 2013).

GM cotton Today in the order of 80% of Australian cotton is genetically modified to counteract insect damage. Farmers commonly refer to this transgenic cotton as ‘Bt’ cotton. This refers to the bacterium Bacillus thuringiensis, which is naturally occurring in soil and is the source of genes that enable the cotton plant to produce a substance toxic to pest insects. While there are inevitably concerns about any genetically modified product that humans use, the assessment of transgenic cotton would appear to be rigorous. Three expert government organisations are involved, the Office of the Gene Technology Regulator, Food Standards Australia New Zealand, and the Australian Pesticides and Veterinary Medicines Authority.

Organic cotton Growing organic cotton is a safe and sustainable practice that uses natural fertilisers and zero toxic chemicals; it lowers the carbon footprint of cotton growing with less greenhouse gases emitted, due in part to being more labour intensive. Organic cotton is not in produced to any significant extent in Australia because it is so labour intensive; low-cost India is the major producer of organic cotton. If one was to grow organic crop in Australia, a three year conversion of the farm’s soils would be necessary to eliminate any pesticides or insecticides that had been used previously. Therefore unless virgin land was to be cultivated, a farmer would have to sacrifice three years of yield to switch to organic cotton. Consumer preferences are such at present that one would need to be very optimistic to rush into growing organic cotton. That is not to say that values and attitudes to organic fibres will not change.

In summary Where dams have been specifically built for irrigation and the soils are conducive to growing cotton, it is a successful business. There are areas where rainfall is sufficient to deliver the water required and this makes for an even more profitable business. In general terms, the land that cotton is grown on is suitable for a range of crops (before being turned into cropping land it was sheep country), and it follows that cotton will continue to be grown in these areas while it remains more profitable or as profitable as competing uses of the land. Those who are keen to ‘develop the north’ argue that cotton growing would be a profitable business. Whether or not this is the case depends on the cost and reliability of water

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supply – they are not envisaging rain-fed cotton – the cost of a cotton gin, the distance from a port, and, naturally, the selling price. The sums have not been done on this proposal. Subsidised water through tax-payer funding of a water storage and irrigation is likely to tip the balance in favour of opening up northern areas, yet the justification is not at all obvious.

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A case study of agriculture: the Atherton Tableland24 T. Hundloe

Introduction In far north Queensland, the Great Dividing Range separates the tropical coastal fields of sugar-cane and bananas from the partly rain-forested and otherwise cleared plateau that gradually becomes wide-open savannah as one moves ever westward. On top of the range is one of the world’s prime agricultural areas, called the Atherton Tableland. The nearest major city, located at the doorstep to the Great Barrier Reef, is Cairns; to the south is the town of Innisfail and to the north the tourist town of Port Douglas. This small part of the vast Australian continent attracts attention as a unique intensive agriculture enclave. On the Tableland itself there are several towns. From the south-east heading north to north-west are Millaa Millaa, Malanda, Atherton and Tolga. In the south-west there is Herberton and Ravenshoe, in the north-west there is Mareeba and Dimbulah. The still relatively extensive rainforests on the Tableland are part of the UNESCO World Heritagelisted Wet Tropics, managed by a government agency, the Wet Tropics Management Authority. Two crater lakes, Lake Barrine and Lake Eacham, are the clue to the Tableland’s ancient geology. They are fabulous tourist spots for a swim on a hot summer day. Prior to the declaration of the World Heritage Area, the forest areas were being selectively logged for valuable rainforest timbers (red cedar being the ‘red gold’ of the rainforests) while the rest of the plateau was farmland cleared by the first European settlers who came to run dairy cattle and grow crops for local town-dwellers.

The land uses The Tableland covers an area of 32 000 km2. Of the total area, near 600 000 ha is either cultivated, dairy-farming country or beef-farming land. Most of the plateau that is not agricultural land of one sort or another is in the Wet Tropics World Heritage Area. The vast range of crops and other farmed products grown on the Tableland is a prime reason to tell its story. If one were to create a farm theme park, Atherton Tableland could provide the model. 233

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Beef, pork and poultry By far the largest area of farmland on the Tableland is devoted to raising beef cattle. This amounts to 550 000 ha, comprising 500 farms running a total of 130 000 head. This averages out to about 4 ha per beast. Compare this very high stocking rate with the very low stocking intensity of the vast pastoral holdings in the semi-arid parts of Australia. Of the Tableland herd, 40 000 head were sold for $30 million in 2010–11, which is an average of $750 per head. The other meat products from the Tableland are poultry and pork. Modern poultry farming requires little land. There are 10 poultry farms for a total of 40 ha, producing 9 million birds for sale. There are six piggeries requiring a total of 20 ha. Pork production is 19 000 head, worth $4.5 million in 2010–11.

Dairy There are 8800  ha of land on the Tableland devoted to dairy farming. This is divided between 62 farms, with an average of ~140 cows. This dairy herd produces 56 million litres of milk worth $28 million in 2010–11, or $0.50 per litre to the farmer. The dairy industry is one of the oldest industries on the Tableland. There is a relatively large milk factory (in context of a small town) in the town of Malanda. The Malanda factory not only produces milk products, it makes its own plastic milk containers to circumvent any problems if the town is cut off from the outside world during a cyclone or by major flooding. Only a few months after the author visited the milk factory in spring 2014, the summer rains of 2015, the best for 50 years, resulted in the isolation of the town and its milk factory. The cows produce milk regardless, rain, hail or shine. The Malanda milk factory went to work manufacturing plastic milk bottles as the milk poured in, and so there was no loss of milk because it could not be bottled.

Forestry and non-food crops In terms of area, the next agricultural pursuit on the Tableland is plantation forestry. It occupies 3600 ha to produce 32 000 m3 of timber worth about $2 million in 2010–11. Maize production covers 3500 ha and produces 17 000 tonnes worth $4.5 million in 2010–11. Grass seed covers ~2000 ha, producing over 700 tonnes worth about $6.5 million in 2010–11. Hay growing accounts for ~3000  ha to produce in the order of 11  000 tonnes, worth close to $2 million in 2010–11. Legume seed is another valuable non-food crop, with under 1000 ha under cultivation, producing just over 1000 tonnes and worth $3 million in 2010–11. Nursery production is a significant money earner, at $10 million in 2010–11, requiring 100 ha of land. The only other product in the non-food category is the growing of flowers. Very little land (40 ha) is required to produce a lot of stems (5 million) worth $4 million in 2010–11.

Fruits The big six fruits, bananas, mangoes, avocados, citrus, papaya and pineapples, grow throughout the Tableland. While most of the large banana farms are not on the Tableland, it has a small share; 33 farms covering 1300 ha and producing 35 000 tonnes of fruit worth $95 million in 2010–11. Mangoes are grown over a very wide area of Queensland; the 200 farms on the Tableland produce in the order of 14  000 tonnes, worth $45 million in

22 – A case study of agriculture: the Atherton Tableland

2010–11. The spread of Australian avocado farms is wide, stretching from the hilly country in northern New South Wales to the Atherton Tableland. On the Tableland there are ~1000 ha under cultivation. Over 6000 tonnes are produced, and in 2010–11 the value was $29 million. The Tableland citrus crop covers 400 ha and produces 7000 tonnes of fruit valued at over $17 million. Papaya is yet another fruit that is grown over a wide geographical range in Australia. On the Tableland, 200 ha are devoted to this fruit, producing close to 8000 tonnes, worth $16 million in 2010–11. There is only one pineapple farm on the Tableland; it produces in the order of 2500 tonnes.

The vegetables Of the vegetables grown, two are worth noting. On the Tableland there are 1200 ha of potatoes, producing 30 000 tonnes worth $20 million in 2010–11. Pumpkins are grown over a much smaller area, 250 ha, producing 9000 tonnes and worth $6.5 million in 2010–11. In addition to these two, there is a category of mixed vegetables produced worth $3 million in 2010–11.

Sugar The Atherton Tableland would not be part of north Queensland if sugar was not grown. There is 8000 ha of this crop on the Tableland. There are 68 farms with an average size approaching 120 ha. Over 700 000 tonnes are produced, valued at $28 million in 2010–11.

The exotics Both lychees and longans are grown on the Tableland. Between them over 400 ha are cultivated, producing in the order of 1000 tonnes of each fruit. The value of the lychee crop in 2010–11 was just over $7.5 million, while the longan crop was worth $3.5 million.

Tea and coffee A significant 750 ha is devoted to tea growing. There are only four farms producing in total 2500 tonnes, worth just over $2.5 million in 2010–11. Coffee is grown by seven farms, with only 300 tonnes produced.

The remainder Another major product is peanuts, with 1700 ha of farmland and 45 farms. The production is 7000 tonnes and in 2010–11 the value was $6 million. Another important enterprise is egg production. There are only two farms but over 1.5 million cartons of eggs are produced annually. The other major farm enterprise in this group is growing table grapes, with eight farms producing nearly $2 million worth of grapes in 2010–11. Products grown on the Tableland but not mentioned above are: basil, cashews, custard apples, macadamias, melons and passionfruit, plus small quantities of exotic fruits. These please customers in the market known as Rusty’s in Cairns, plus a much smaller one in the tourist village of Kuranda. Also produced on the Tableland are aquaculture products, honey and tea-tree products.

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In summary The Atherton Tableland comprises near to 600 000 ha of farming land; there are ~2000 farms and the gross farm revenue measured in 2010–11 was marginally over $400 million. The vast range of agricultural pursuits is a function of the variety of soils, the different elevations (steep mountains, river gullies, undulating hills and flat river plains) and consequent different temperatures and rainfall. The lowest elevation on the Tableland is at Mareeba at 400 m, the highest at Ravenshoe (the highest town in Queensland) at 930 m. The annual rainfall ranges from a low of under 800 mm at Dimbulah to a high of 3000 mm at Millaa Millaa. Mareeba and Dimbulah are the hottest towns, while Ravenshoe has the coldest winters. There is much more to the agricultural story of the Atherton Tableland. Until a generation ago the Tableland was Australia’s prime tobacco-growing area, but tobacco is no longer grown in Australia. Timber-getting and the timber mills are yet other fascinating features of a not-too-distant past. The rugged and rusted-covered scrap-metal of the skeletons of derelict timber mills jar the mind back to the late 1980s when conflict flared in the streets of Ravenshoe as logging was banned with the declaration of Wet Tropics World Heritage area. Notwithstanding the fact that much of the Tableland is rain fed, there is need for an irrigation scheme in the Mareeba–Dimbulah area. This illustrates the diversity of country in such a small area. As a microcosm of Australian agriculture the Atherton Tableland simply appears to be just too varied, with too many different farming pursuits in such a small area. Yet the vast array of agricultural products that are covered in this book suggests that farmland Australia is a jigsaw of vast and tiny pieces.

23

Farming the sun and wind T. Hundloe and S. Sharma

Introduction If this book were focused on agriculture in the United States or Brazil, the reader would have expected considerable attention to be given to fuels: the growing of corn (maize) in the United States for ethanol production and the ability of Brazilian sugar-cane mills to alternate between producing sugar and ethanol. In these countries ethanol and bio-diesel production is undertaken as a tentative step towards replacing fossil-fuel derived energy, mainly for the powering of motor vehicles. A small amount of bio-fuel is produced in Australia, but with one exception it is not made from crops grown specifically for that purpose. This has meant that the ‘food versus fuel’ debate has not arisen in Australia. Yet, as we will discuss later, in Australia there is the potential for competition to arise between use of land in agriculture and use for solar energy production. In a completely different context, Australian farmers are benefiting, indirectly it needs to be said, from the utilisation of ‘waste’ or by-products emanating from farming to produce bio-fuels. A good example is tallow used to make bio-diesel. Note that the use of quotes in referring to ‘waste’ is to make the point that something being put to productive use is not being treated as without use. This chapter is not about farming’s contribution to greenhouse gases and climate change. That is an enormous topic in its own right. Others have written about it and in the future we can expect far more attention to be given to this topic. Nor is the chapter about reducing or mitigating carbon emissions, although this is an area of research. For example, at Woodstock, just west of Townsville, is CSIRO’s Landsdown Pasture Research Station. Scientists there are seeking to determine the relationship between methane emissions and various grasses and other feed available to tropical beef cattle. Many on-ground agricultural experiments, such as research into the benefits of zero tillage, have a greenhouse gas reduction aspect to them. Also, since 2014, there has been a government program called the Carbon Farming Initiate. Among other things this aims to encourage farmers to reduce their emissions of carbon dioxide and other greenhouse gases and earn credits, which can be sold. As with other attempts to develop greenhouse gas reduction mechanisms based on markets, this initiative will need to prove itself viable. There is not yet a genuine carbon market in Australia. 237

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Utilising farmed products to generate bio-fuels The production of ethanol from sugar-cane has a long history in Australia. For example, between 1929 and 1957 Queensland law required that 10% ethanol be mixed with petrol. The ethanol was produced from sugar-cane. That ethanol has a long history as a motor vehicle fuel, if only in tiny quantities until Brazil and the United States took on large-scale production, need not come as a surprise. The ‘T’ Model Ford was originally designed to run on it. Henry Ford thought American farmers would grow and, presumably, process their own fuel. Ethanol is produced at three sites in Australia at present. Just outside Dalby on the Darling Downs, sorghum is cultivated for use in the local processing plant. At Sarina, south of Mackay, attached to the sugar mill is a distillery where molasses is fermented into ethanol. At Nowra in New South Wales, the Manildra flour mill utilises what would otherwise be waste starch to produce ethanol. It commenced ethanol operations in 1991 and produces far more than the other two plants. The other bio-fuel made in Australia is bio-diesel. The number of bio-diesel plants in operation constantly varies. At the time of writing there are three major ones: at Barnawartha in northern Victoria, at Narangba north of Brisbane, and at Humpty Doo in the Northern Territory. The Victorian bio-diesel plant is co-located with an abattoir and rendering plant. Tallow is the main feedstock, although the plant also takes in some used cooking oil. The Queensland plant also uses tallow from a nearby abattoir, but price increases for this feedstock have resulted in a move to using some used cooking oil. Australian bio-diesel producers have to compete on price with the world’s largest bio-diesel producer in Singapore, and there is something akin to a world market price for tallow. As tallow of a certain grade is used for soap manufacture this is another source of competition. The third plant, at Humpty Doo, was using imported palm oil when it shut down in 2009. When it reopens it is planned to use tallow plus used cooking oil and palm waste sludge. There are other bio-diesel plants in Australia. Two at Picton and Largs Bay are officially ‘on standby’, while the others are small scale; for example, a plant at Dandenong in suburban Melbourne processes the cooking oil waste from McDonald’s cafes and the fuel is used in the business’s fleet of trucks; another at Mt Tom Price processes used cooking oil gathered from the kitchens of the mine workers. In addition there are a small number that are either in the start-up stage or are experimental. The bio-diesel story is very similar that of ethanol. In the 1880s, Rudolf Diesel invented the engine that took his name. Its fuel was to be peanut oil. Imagine Kingaroy as the motor fuel capital of the world! The bio-fuel story has a long way to go. Much will depend on progress through the Intergovernmental Panel on Climate Change in formulating international agreement on reducing the build-up of greenhouse gases as well as increases in the price of conventional motor fuels such as petrol and diesel. With regard to the latter it would seem that the peak of ‘peak oil’ has been pushed further into the future with the increased exploitation of so-called ‘unconventional oils’ in shale. This new supply of fossil fuels is likely to dampen the demand for alternative fuels, at least for some time. In Australia at present, government policies have a direct effect on the production of alternative fuels. If a certain percentage of bio-fuel is mandated to be produced to meet a government mandate, that amount will be produced. This is very much a political matter, not one based on cost–benefit analysis or science. Bio-fuel production does not depend on government to be economically viable, particularly if the feedstock has no, or very little in the way of, economic use. White and Hun-

23 – Farming the sun and wind

dloe (see Chapter 11) explored the potential use of banana discards as the feedstock for on-farm ethanol production using small-scale production units. They found that ethanol production was competitive with traditional fuels without any government subsidy. Despite this, the production of banana-based ethanol has not happened, and is unlikely to happen. What is theoretically possible is not always practical. Australian farms run all their farm machinery and their utilities and, often, cars on diesel, and hence have no personal need to install small-scale ethanol plants.

Farming the sun The first author’s initial experience in undertaking cost–benefit analysis was to calculate the net benefits of installing solar hot-water systems on the roofs of Brisbane houses. The University of Queensland was one of a small number of research institutions working on solar hot-water heaters. The payback period for the average Brisbane house at that time was in the order of 15 years. As the years went by and economies of scale were achieved, take-up of solar hot-water panels increased and consumer interest grew. Solar hot-water panels are one thing; photovoltaics, the direct conversion of sunlight to electricity, is another. This form of power generation has developed rapidly over the past two decades. It sits at number three behind hydro-electricity and wind power in terms of installed capacity on a global scale. Until ~20 years ago, photovoltaic systems were restricted to specialised, often novelty, products. But then governments around the world came to support solar power by allowing those who installed solar panels to sell excess electricity to the general grid. The invention of grid-connected systems, with the incentive of attractive feed-in tariffs for householders, changed the solar industry into a significant player in some countries. Our interest is in the construction of large-scale solar farms with feed-in to the grid or, in rural communities not connected to the grid, in stand-alone solar farms replacing diesel electricity generators. Much of Australia obtains enough sunlight to make these economic viable propositions. Obviously, land is covered, taken out of other uses, when solar farms are built. It boils than to the opportunity cost: would a hectare of solar cells make as much net profit as a hectare used for grazing? Clearly, prime quality arable land would not be suitable, but much of the poorer quality grazing land might be an economic proposition as a solar farm. One can envisage owners of large farms converting some of their land to farming the sun and thereby increasing farm income. Others, generally smaller farms in the right location, could end up in the hands of energy companies. However, it is early days yet and both the decreasing costs of solar panels, coming about due to scale economies in production, plus greenhouse gas/climate policy changes (both internationally and domestic) will drive the speed of growth of solar farming. On the Sunshine Coast, north of Brisbane, the local government authority has purchased a sugar-cane farm to convert to a solar farm.

Farming the wind Wind farms are relatively easy to install without impacting on the agricultural production of farms. Individually each turbine takes up little space. We present a photograph below of a beef cattle property just outside of Ravenshoe on the Atherton Tableland. It is named, appropriately, ‘Windy Hill’ (see Fig. 23.1). Installation of wind turbines is an additional income source for farmers. The Windy Hill farm with twenty turbines produces enough

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Fig. 23.1.  Windy Hill Farm.

electricity to meet the needs of a town with a population with 3500 homes. The farm has close neighbours, the township is within eyesight. Far from being an eye-sore, it is welcomed by local folk and travellers stop to view it – and wonder what all the ‘noise’ about noise is about.

SECTION 5 TOWARDS A SUSTAINABLE FUTURE

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24

A blueprint for clean, green Australian agriculture T. Hundloe, S. Blagrove, S. Cantwell, J. de Miranda and H. Ditton

Introduction Considerable territory has been covered in reaching the stage where we are ready to outline a blueprint. The nation’s major agricultural (primarily food) sectors have been introduced with the aim of assessing their future in a world with a much larger population and correspondingly increased food requirements. We have looked far into the future, then on occasion taken the story back to European settlement of Australia to add perspective. Change can be rapid, slow or anywhere in between. It can be foreseen with a degree of certainty or simply appear out of the unknown. Looking back we now know that China, unexpectedly becoming a ‘communist’ capitalist country, doubled its gross domestic product on average every seven years. Its prosperity has fed much of Australia’s growth in wealth in recent years. We know that Chinese growth will slow, but that there are a number of other developing countries with the same prospects for growth as China. Our farmed products won’t be without newly wealthy consumers. Of course we know much more about how we farmed in the past than we can predict for the future. We can investigate the weather pattern data of the Bureau of Meteorology and discover that on average over the past century-and-a-half we have experienced a severe drought every 18 years. Severe droughts result in severe economic consequences – for example the drought at the end of the 19th century leading into the 20th resulted in the loss of about half the nation’s sheep flock and the economy took a battering. There is no controlling the planet’s weather patterns, except to make handling severe events ever more difficult by continuing to add greenhouse gases to the atmosphere. If we attempt to look far ahead, we should ask if the mining of coal will still trump agriculture as a foreign dollar earner. In posing this question we are likely to be reminded of the old joke: nuclear fusion, with its limitless, pollution-free and inexpensive delivery of all the energy we need to live our modern lifestyles is 30 years away … and always will be. Yet, this time it might not be. Then our coal will become a stranded asset. The world we know will change dramatically if – when – the breakthrough to fusion occurs. Except we will still be eating pretty much the same foods. We like what we eat. Australia is already a key player in the production and export of food. We have emphasised our high ranking, at number one for some commodities, as an exporter. We have drawn attention to the physical nature of our vast continent – much of it semi-arid and 243

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arid, but still capable of producing meat and wool eagerly bought by our overseas customers. Not to be overlooked is that on a per capita basis we rank first in terms of arable land; and first by far in terms of organic land. These attributes underline the economic advantage of a relatively small population and the very high labour productivity of our agriculture sector. Labour productivity has kept on improving as the official Australian statistics show, due to farm machines of serious size and sophistication replacing back-breaking manual labour. If we consider both exports and imports of certain commodities, that is, the net situation, we discover that on a per capita basis we rank first in crops; and for food overall we rank fourth. On a per capita basis, New Zealand is number one in the world – again a result of a small population, much arable land and high productivity. With these positive attributes and caveats, we need not, and should not, succumb to inaction. A blueprint can set out the guiding principles with no reason that it can’t be worked on from the day the ink dries. And it can be flexible enough to respond to the inevitable unexpected changes that are coming.

The blueprint The blueprint is based on a small number of key principles. The overriding principles are sustainability, environmental, economic and social. In the pursuit of brevity we will not deal with each aspect separately; rather we encourage the reader to ponder each proposal that follows in terms of advancing each of the elements for a sustainable future.

The sustainability criteria Environmental sustainability in terms of farming needs to be understood in the context of both near-natural systems and significantly modified (cultivated) farms. We can think of near-natural agricultural systems as the vast savannah lands and the extensive semi-arid and arid grazing country. Virtually everywhere else can be placed in the modified category. These two different starting points result in different policies and actions.

The reversibility principle Regardless of the land’s present state and the use made of it, there should not be any action that leads to deterioration of the land’s agricultural productive capacity. Where it is feasible and prudent to take action to reverse any decline in productivity that has occurred to date, this should be undertaken. For example, overgrazed land should be rested; eroded land replanted; nutrient-depleted land should be sown with nitrogen-fixing crops and ‘greenmanured’. These are all actions for farmers to take in their own interest. These actions have flow-on benefits of both an environmental and economic nature as a bonus public good. To the extent feasible and prudent, farming that irreversibly alters the land (its soils in particular) is to be avoided. Readily reversible land-use changes, such as conversion from sheep grazing to cattle grazing, should be a prime goal. There are numerous other examples of farmers being able to change products according to movements in market conditions without having to make irreversible changes to their land, its soils and overall agricultural productivity, if not season-to-season then in due course. The ability to do this is of significant monetary value to farmers. Different farm machinery and on-farm struc-

24 – A blueprint for clean, green Australian agriculture

tures could be required when the use of the land is changed, but as long as the land retains its original productivity we have both environmental and economic sustainability. Reversibility is a necessary but not sufficient condition if we are to maintain the nation’s overall agricultural output. The first priority is to retain all existing agricultural land. The loss of agriculture to expanding cities or other forms of irreversible change is too high a cost. The increasing demand for food, and its subsequent increasing economic value, means that irreversible changes come at an ever higher price.

The golden rule principle The next fundamental principle is ‘do no harm’ off-farm; that is, to ensure that there are no negative externalities. We call this the ‘golden rule’ because it means you do nothing to others that you would not want them to do to you. As an example, a downstream fisher would not want a loss of harvest as a result of toxins coming from an upstream farm. An upstream farmer would not appreciate it if the water flowing through his farm and used for growing crops was instead diverted to a new town built upstream. In the present era, farming activities that concentrate large numbers of animals, such as cattle feedlots, dairy-farms, piggeries and poultry sheds, are required to treat effluent on their properties to prevent discharge off-farm. However, dilute run-off from a number of farms, and here we think of cane farms adjacent to the Great Barrier Reef as a prime example, is a different matter. There are various approaches to reducing externalities in these situations, and if the solution has both an environmental and an on-farm financial benefit the incentive to introduce it should be strong. There are two sub-themes to the golden rule principle: reduce fertiliser use, and reduce water use.

Reducing fertiliser use Far too much fertiliser is wasted on our farms. In other words, more is applied to the plants than they can utilise. The excess fertiliser runs off into local creeks, then to rivers and other water bodies, and some reaches the ocean if the journey is not too far. What does not run off can find its way into the local water table. The first reason to reduce fertiliser application is to decrease the costs of farming. As it is a reasonable assumption that fertilisers will increase in cost as demand increases and supply of fossil fuels and phosphate rock reach their peak and start to decline, any reduction in application on farms must be an economic benefit. The second reason to reduce fertiliser application – and this is most important in farming adjacent to the Great Barrier Reef and other highly sensitive areas – is to decrease their environmental impacts offfarm, the negative externalities. Strategies applicable to reducing fertiliser use and waste depend on the type of farming, the soils, the layout of paddocks, and weather conditions throughout the year. In the catchments adjacent to the Great Barrier Reef and crops such as irrigated sugar-cane and bananas, the costs and benefits of an universal roll-out of fertigation must be explored, and if this technology meets economic criteria – overall net benefits, on-farm plus off-farm – it needs to be adopted. Assuming that it is to be implemented, the funding arrangements need to be resolved. This raises the issue of what particular public policy principle is to be applied, the ‘polluter pays’ or the ‘beneficiary/ies pay’. The latter principle would suggest a

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Table 24.1.  Priorities for reducing pollutants to the Great Barrier Reef Management priorities

Relative priority

Region

Pollutant management

Key land uses

1

Wet Tropics

Fertiliser nitrogen reduction

Sugar-cane, bananas

Burdekin

Erosion management

Grazing

Fitzroy

Erosion management

Grazing, cropping

Burdekin

Pesticide reduction in (lower) Burdekin and Haughton catchments

Sugar-cane

Mackay, Whitsunday

Pesticide reduction in all catchments

Sugar-cane

Burdekin

Fertiliser nitrogen reduction in (lower) Burdekin and Haughton catchments

Sugar-cane

Mackay, Whitsunday

Fertiliser nitrogen reduction

Sugar-cane

Burnett, Mary

Erosion management in all catchments

Grazing

Wet Tropics

Pesticide reduction in all catchments

Sugar-cane

Fitzroy

Pesticide reduction in all catchments

Grazing, cropping

2

3

Source: Brodie et al. (2013).

public subsidy to farmers or a special fee paid by the beneficiary/ies (for example, Great Barrier Reef tourists) to go to the farmers. A group of environmental exports (Brodie et al. 2013, p. 9) have summarised the priorities involved in reducing pollutants on the Great Barrier Reef (see Table 24.1).

Reducing water use Water and fertilisers go together in most cases; it is the water that carries the excess fertilisers off-farm. Water run-off, whether as a result of heavy rainfall or over-irrigation, can move herbicides, pesticides and fine sediments from paddocks into streams, and ultimately cause environmental and economic damage. Since the so-called ‘water reforms’ of the 1990s when the then Industry Commission analysed water use and made recommendations for significant changes to the management of publicly provided water infrastructure, sections of the Australian farming community have been paying for water according to the quantity used. This has provided an incentive to be conservative in the application of water on-farm and made farmers think about which irrigated crop provides ‘the most economic value per drop’. Farmers have changed their businesses according to this type of analysis. Still, there are significant farming areas, particularly in the high rainfall regions, where farm water is not charged for. And of course, there are vast areas of Australia where agriculture is rain fed, and some regions where vast fields of crops are flooded in the wet season. These different situations mean that there is no single means of ensuring that water does not carry pollutants away from the farm. In cases of seasonal flooding, the action needs to be to reduce fertilisers and pesticides. As discussed above in the context of fertiliser use, the installation of drip irrigation (either below or above ground) and feeding fertilisers to the plant’s roots is an ideal solu-

24 – A blueprint for clean, green Australian agriculture

tion to curb over-use of both water and fertilisers. Completely different methods are required where the task is to control the movement of chemicals from large areas of improved pastures. In this case, the starting point is the retention of a thick vegetative cover along stream banks. If there is adequate vegetation in place a sufficient distance removed from the flow of water, it retards any movement of fertilisers and herbicides. In numerous parts of Australia, revegetation and fencing of riparian zones is required.

The cost–benefit analysis principle It would be illogical to argue that decisions should not be expected to produce greater benefits than costs, whether they be decisions made by individuals in their private interest, corporations in their shareholders’ interests or governments in the public interest. This is the cost–benefit (CBA) principle. Many questions and matters of some complexity follow. First, whose benefits and whose costs are to be included? The answer is straightforward: all those whose economic wellbeing is affected by the decision. This brings those impacted by externalities into the calculation. The omission of externalities in CBAs was a major flaw in the practice until recently. How are the costs and benefits to be measured? There has to be a common measuring rod; otherwise we would be comparing apples to oranges. The rod does not have to be money, but it is difficult to think of another candidate. Considerable progress has been made since the 1980s in devising techniques to measure non-market goods and services – things that we don’t pay for directly, such as the underwater mosaic of life on the Great Barrier Reef. We can bring many previously overlooked or unmeasured things into the analysis. In noting this, we recognise that some will reject or at least express discomfort in bringing objects or experiences of an emotional kind into an economic framework. The expansion of the old-fashioned narrow CBA into what some term ‘extended CBA’ or ‘social CBA’ might help some accept its utility. Then there is the most perplexing matter of discounting costs and benefits over time. Discounting means that a cost or benefit accruing in, say, 50 years’ time is but a tiny percentage of what it is today. In other words, projects such as a major dam, which have substantial construction costs but take many years to produce economic benefits, have difficulty passing the CBA test. Earlier in this book we reported the dismal failure of the Ord River irrigation project on economic terms. Ever since, economists (and some politicians) have been wary of public funding of such large projects, particularly if both their location and environment put them at a disadvantage from the outset. We must emphasise that the concept of discounting the future is contrary to sustainability principles. In economic language we would say that the discount rate (otherwise called ‘pure time preference’) is, or should be, zero. However, a problem arises when we take as given that the money spent on building a large dam could have been used to build a factory, a cruise liner or a private hospital, and in these allocations the expenditure is likely to have earned a profit – there is an ‘opportunity cost’ involved. From this perspective the discount rate is no longer zero. Government treasury departments will require public financing of something like a large dam to cover its opportunity cost, meaning that the sum of its benefits (profits) must at least equal the sum of its costs, including the opportunity cost of capital over the lifetime of the project. When these flows of money are converted to a monetary value today, we have what is known as a ‘net present value’. With this principle in mind it is likely that few if any of the proposals to construct large dams and irrigation systems in the far north of Australia will be funded, unless govern-

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ments override the CBA principle. While not disregarding the value of CBA, we can pose an interesting question. Of the (generally large) projects that have only after many years brought about a genuine increase in economic wellbeing, what number would have been funded if they have had to meet the test of a positive net present value with a discount rate of 5%, even 2%?

The cost-effectiveness analysis principle Applying the concept of cost-effectiveness analysis (CEA) requires research and implementation of the least costly way of meeting a goal. That is, if we (government on our behalf, society in general) have decided on a desired outcome that could be achieved by a variety of methods, which one comes at least cost? This principle has particular relevance in the context of helping answer some big questions. For example, if the objective is to get the greatest agricultural net gain out of the far north of Australia, what feasible project or projects should we pursue, that is fund? There are some very costly schemes being promoted as we write. Both the CBA and CEA principles would do much to help make sound decisions about developing the north. The CBA principle requires a comparison of other possibilities, including the status quo, the latter being to keep running cattle on near-pristine (organic) savannah land, continuing to grow mangoes at Katherine near Darwin and, given the existence of the Ord Dam (what economists call ‘sunk cost’), seek the most profitable use of the water it provides. This is a job for CEA. What CEA cannot resolve is whether or not ‘develop the north’ is a sensible economic or environmental objective. A specific issue discussed throughout this book where CEA can play a vital role is in assessing the various strategies and on-farm projects that would address the run-off of chemicals and sediments from farms adjacent to the Great Barrier Reef. The Australian Government is making available a significant amount of money that is in one way or the other intended to address the health of this coral ecosystem. We can take it as given that reversing degradation and maintaining a healthy coral reef ecosystem is a goal desired by all Australians. Economists (see Hundloe et al. 1987; Hundloe 1990; Hundloe and Blamey 1993; Hundloe 1995; Rolfe et al. 2011) have published evidence of the benefits of reversing degradation. We can also take as given a strong desire to allow the continuation of the nation’s profitable sugar-cane and banana industries, these being the ones closest to the affected marine environment. Hence, the question becomes: what should we do that allows for both of these objectives to be achieved and at least cost? Fortunately, a group of cane farmers, assisted by Queensland government economists, have commenced to search for answers (see Box 24.1).

The principle of preserving a reputation It is a very old adage that reputation is everything, the most important thing one has that is worth preserving. Australian agricultural practice, in terms of farming methods, in terms of products put on the market and in terms of bio-security arrangements, has led to the world-wide recognition of a clean and green ‘brand Australia’. This is our reputation. It is important to note that it is just not agriculture that has resulted in this specific branding. Australia is known to have a very clean environment compared to most places in the world. Its cities, countryside and beaches are clean. An air pollution event caused by a

24 – A blueprint for clean, green Australian agriculture

Box 24.1: Farmers taking the initiative A group of sugar-cane farmers with farms adjacent to the Great Barrier Reef have come together with support from WWF-Australia, the Coca-Cola Foundation, national resource management (NRM) groups, the Australian Government and others under a program called Project Catalyst to trial cost-effective means of improving the quality of water that flows from their farms into the Great Barrier Reef. These projects are summarised here. Joe and Christine Muscat: Map their soil and target fertilisers rather than apply them across-the-board. This is formally known as ‘controlled release urea’. The Muscats are also experimenting with rotational crops (maize, peanuts, kenaf, and two types of hemp). Gerry and Barb Deguara: Trialling a two-year fallow system using legumes (soybeans and chickpeas). Traditionally a cane block is left fallow for a year after 4–5 years of cane growing, but this leads to a decrease in nutrients and pathogens can build up. The Deguaras are expecting increased yields and a reduction in fertiliser application. Rob and Maree Slugget: These farmers have their soils sampled and mapped before formulating a nutrition plan for fertiliser application, and are matching herbicide use to specific parts of the paddock. Their practice of what is called ‘precision agriculture’ is expected to reduce costs (less inputs) and improve the quality of water draining from their farm. John and Phil Deguara: As experienced by other farmers, the Deguaras have discovered that regardless of the amount of fertiliser applied to low-yielding parts of their cultivation, the sugar-cane does not use the nitrogen like the high-yielding parts do. Uniform application of fertilisers is a waste of money and a risk to water quality. A trial of variable-rate fertiliser application is underway. Scott and Maria Simpson: Like other farmers, this couple have had their soils tested and nutrients are blended and applied according to need rather than ‘one size fits all’. The Simpsons are experimenting with ‘skip row’ planting where a row is left fallow or planted with a legume between one row of cane and the next. This could eliminate the need for whole-block fallow, as after each crop cycle the fallow/legume row will alternate. Michael and Peter Ottone: These farmers are experimenting with replacing the use of top-dressed fertiliser with compost tea, molasses and ‘bio fert’. The Reinaudo family: This is yet another farm with variable soil qualities. They have discovered there is no benefit, in fact a waste, in putting the same level of nutrients across their farm. They are experimenting with variable rates. Norm Reid and family: Norm’s farm originally ran beef cattle and now grows sugar-cane. Norm practises minimum tillage while experimenting with various tillage methods. He has regular soil tests taken and determines nutrient application rates accordingly. Stephen Accornero: Stephen is trialling corn as a rotation crop to sugar-cane. He is not only making money from the sale of corn but has found an improvement in his cane yield. Chris Lyne: Chris has discovered that the farm has a two major soil types and, hence, he needs to apply different fertiliser blends. He is also very aware of water use.

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While using standard furrow irrigation, he captures about half of the water applied in recycle pits and re-uses this on the farm. He has a lysimeter and a gas chamber installed to measure nitrogen losses through leaching and volatilisation. Willy Lucas: Willy is yet another farmer with highly variable soils, of at least three different qualities. He obtains nearly one-third of his water from the local irrigation channel system and the remainder from bores. He collects about one-quarter of his water run-off in a recycle pit for re-use on the farm. He aims to install a fully automated irrigation system which should optimise water use with far less labour involved. Chris and Sonya Hesp: The Hesps are concerned with soil compaction during harvesting. Once this is addressed they aim to expand their green trash system. They have problems acquiring mill mud at a reasonable cost due to their distance to the local mill and so are seeking to reduce the amount spread on the farm (and hence the outlay). Joe Tama: Joe is seeking to reclaim 100% of his and his neighbour’s irrigation tail-water. At present he has one-quarter of his farm under trickle irrigation and the remainder under common flood irrigation. Joe aims to analyse the economic costs and benefits of a shift to drip irrigation. This experiment could be a game changer.

temperature inversion over one of its major cities is extremely rare. Australia has more natural World Heritage areas (including those adjacent to major farming areas, such as the Great Barrier Reef, the Wet Tropics and the Gondwana Rainforests) than any other country. Australia is a world leader in nature-based and eco-tourism, largely based on its World Heritage areas. In sum, these attributes are the source of the brand. Diminishing any one of these clean and green characteristics diminishes the brand in general. Hence, the recent adverse publicity about the allegedly poor health of the Great Barrier Reef had the potential to damage the brand overall. It is because of this flow-on effect that we must maintain an overall eye on all matters environmental in the country. While we celebrate and make good use of our national brand in selling our farmed products overseas, there already exist a range of location-specific brands that are well recognised by foreign consumers. For example, there are Tasmanian cherries, King Island beef, and Barossa, McLaren Vale and Clare Valley wines. It is important not to override the value of these existing local identities. With a little thought it should be possible to combine a location-specific brand (or even name-specific brand) with the ‘buy Australian’ message that we wish to promote overseas. We have noted in previous chapters the fact that Australia has far more organic farmland (in the main, the extensive grazing country that stretches from the northern savannahs to the semi-arid plains, to the arid interior and the large deserts) than any other country in the world. This forms part of our clean and green image. It is not yet widely appreciated that we have so much organic land. We need to play more on this positive fact, and we should seek to add to the existing immense area the ‘wild capture’ regions that are used by Indigenous people for hunting and gathering. Wild capture areas are recognised as a category of organic land. And why not have our enormous Australian Fishing Zone recognised as a ‘wild capture’ area, which it is?

We can do our bit and attempt a bit more The challenge to feed an increasing global population is far too great for any one country. Even meeting food requirements in Asia is well and truly beyond one country. Recognising

24 – A blueprint for clean, green Australian agriculture

this, we can make the realistic assessment that Australia (if it does not exceed its own food requirements due to a large increase in population) can play a significant role in providing the types of agricultural products that will increase in demand. As an already very efficient farming nation we cannot expect large gains in productivity, but we should benefit from significantly increased foreign income as demand pushes against limited supply. Except for limited periods of time, Australia’s prosperity has come from its world-class agriculture. At times, mining ‘booms’ have knocked agriculture from its prime place. They are not sustainable. Agriculture can be if we want it to be.

251

Endnotes

The question of the optimum size of the Australian population has exercised the minds of politicians and scientists for a considerable time. Here is one example. In 1968, Dr F.H.W. Mosley of CSIRO’s Division of Plant Industry suggested a figure of 200 million people. This is more than an eight-fold increase on the country’s population in 2015. However, Mosley said that this would be ‘at great risk to our natural resources’ (quoted in Birch 1975, p. 173). 2 This character is from David Copperfield. He has a horrible time in England (although always hoping for the best), being employed by the mean and nasty Uriah Heep. Good fortune comes when Micawber and family migrate to Australia, where he becomes a bank manager and then a magistrate. Ever hoping for the best he got it. That should be no comfort in those who base their decisions on empirical data rather than dreaming. 3 As this book was going to press the United Nations issued its 2015 world population forecasts indicating a larger global population in 2050 than previously predicted, up from 9.3 billion to 9.7 billion. 4 The following population estimates, as for this one, are from Munz and Reiterer 2009. 5 This assessment made by Swapan Dasgupta was reported in The Weekend Australian, 6–7 June 2015. 6 Six of these countries are very small. Sudan is excluded. 7 Quoted in Russell P (2010) Savage or Civilised?: Manners in Colonial Australia, University of New South Wales Press, Sydney. 8 We recognise that some Australian businesses have already established consumer preference for a local or product-specific food, and the idea of overriding (or replacing) that with a generic ‘Australian-grown’ branding will not be looked upon favourably. 9 In comparison there are in the order of 90 million cattle (beef and dairy) in the United States. The United States is the number one beef producer in the world. India, Brazil and China have more cattle than the United States. While having more cattle than Australia, the United States imports beef from Australia while exporting only a small proportion of its own beef. 10 This data is based on the ‘water footprint’ and ‘virtual water’ concept. They are indicative only and represent a very broad estimate of water-to-product relationships. These figures are used to simply point out that there are ‘hidden’ water use elements associated with the consumption of goods. The numbers should not be taken to infer that one product is more water efficient than another, or to arrive at a dollar value of water-to-product relationships. The value of water will be discussed further in this chapter, and the reasoning behind the many complications arising when trying to measure ‘virtual’ or ‘embedded’ water will become apparent. 11 ‘ Fracking’ is derived from ‘fracturing’, something originally done by dynamite to break open rocky ground; today it includes hydraulic fracturing. 1

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‘Lock the Gate’ is the name of a rural protest group active in Australia. This chapter is a marginally modified version of the article titled ‘The impact of fresh production specifications on the Australian food and nutrition system: a case study of the north Queensland banana industry’, published in Public Health Nutrition 14(8), 1489–1495 (White et al. 2011). Reproduced with permission. 14 Cells, tissues, or any part of a pathogen that can cause disease to the crop. 15 Controlled traffic farming (CFT) means that agricultural machinery is not repeatedly operating on cultivated paddocks, especially on the same tracks as that compacts the soil and interferes with water infiltration. 16 Erucic acid is a monosaturated omega-9 fatty acid thought to be toxic to cardiac muscles, hence the value of low levels in the oil. 17 There is also an irony here in that governments (the taxpayer) of the day subsided the construction of many of the vessels in the fishery through a ‘boat bounty’ in order to facilitate the presence of a merchant fleet in northern Australian waters. In effect, taxpayers contributed to creating the extensive fishing effort in the first place and then had to pay a number of times to substantially reduce it so that the fishery was economically sustainable. 18 The aquaculture category also includes the production of pearls, which obviously do not contribute to food supply! 19 Pearl oysters have been omitted from consideration. 20 Includes all salmon and trout but Atlantic salmon from Tasmania dominates. 21 A proportion of this production is used as bait by recreational anglers. 22 An input into the aquaculture of southern bluefin tuna is fish caught from the wild. 23 Seafood consumption may be reported as the actual volume of fish consumed (e.g. the weight of fillets) or live weight, which is the conversion of the fillet weight to the weight of the actual whole fish from which the fillets were removed. 24 The author thanks Bernie English for much of the data presented in this chapter. 12 13

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Index

abalone  119, 120, 121, 206, 207 Accornero, Stephen  249 acidic soils  164 Adria Downs station  174, 175 aerial spraying  143 Africa  25, 36, 49, 156, 157, 159 agricultural self-sufficiency  12, 29–30 cultivable land  43 egg production  200 exports to  66 food consumption changes  19–20 ageing population  81, 208 agricultural decline, Russia  11 agricultural exports  4–5, 13 Australia  51, 53–71, 75 China and  70 agricultural history  36 agricultural land foreign ownership  81 loss of  245 Northern Australia  101 protection of  125–31 agricultural products, African demand for  28, 29 agricultural research  35, 37 agriculture limitations  3, 13 water assets and  88, 92 air transport  80 alcohol, barley and  160 Alice Springs  99, 110 Americas  38, 191 egg production  199 middle class of  30 anchovy fisheries  203 animal feed  150 barley  160, 161, 163 canola 164

animal rights  137 Anna Creek station  46, 171, 177 Antarctica  38, 117 antibiotic resistance markers  135 apple industry  126, 180, 181, 183, 186 aquaculture  117–22, 203–9 aquifers 220 Argentina  20, 26, 73, 112, 167, 176 artificial hormones, chickens  192, 195 Asia  2, 16, 26, 49, 54, 57, 61, 70, 80, 150, 157, 162, 166, 174, 180, 186, 191, 199, 228 dietary demands  26–8 exports to  66, 181 population growth  18 aspirational modelling  16–17 Atherton Tableland  6–7, 47, 179, 211 case study  233–6 Atlantic salmon  120, 121, 205, 206, 209 Attali, Jacques  12, 14 Attard, Curtis  viii Austrade  32, 185 Australia  11, 15, 24, 42, 45, 64, 83 agricultural competition and  3, 50–1, 53–71, 75 banana industry  139–46 barley industry  160–2 chicken industry  191–7 CJD and  135 ‘clean, green’ planning  243–51 cotton industry  227–31 cultivable land  43, 65–6 dairy farming  211–15 egg industry  199–201 fisheries  117–22, 203–9 foreign investment in  81–2 global food supplies and  12, 26, 81, 250–1 GM foods and  133–4 259

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grains industries  149–60 grazing lands  46 horticulture industry  179–86 migration and  25 oilseeds industry  162, 164–5 sheep industry  217–25 soils 109–15 sorghum industry  156–60 water resources  87–102 wine growing  184–5 Australian Aboriginal and Torres Strait Islander peoples  33, 170 fisheries and  203 pastoral industry and  174 Australian Agricultural Company (AACo)  33, 50, 82 Australian Banana Growers Council (ABGC)  139, 142 Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)  32, 75, 170, 176, 205, 214 Australian Bureau of Statistics (ABS)  112, 113–15, 200 Australian Durum (AD) (Triticum durum) wheat  150, 154, 155 Australian Estates  81–2 Australian Fishing Zone  250 automatic feeding, chickens  193 automatic irrigation  250 avocados  180, 181, 182, 234 banana industry  4, 36, 90, 91, 102, 180, 181, 182, 186, 233, 245, 248 Atherton Tableland  234 Australia 139–46 ethanol and  239 banana republic  53, 58 Banda Aceh tsunami  77 Bangladesh  18, 27–8, 30, 164 barley (Hordeum vulgare L.) industry  36, 54, 65, 149, 150, 157, 159, 160–2, 168, 169 barn-fed cows  214 barramundi (Lates calcarifer)  121, 206, 207 basic global foods  36, 39, 40 beef cattle industry  5, 26, 39, 42, 54, 55, 61, 64, 65, 70, 75, 77, 78, 82, 87, 107, 167–78, 180, 225, 237, 239, 250

Atherton Tableland  233, 234 China and  19 pollution and  188 product demand  76, 81, 150, 175–6 wool production and  173, 221 bent bananas  135, 139–46 beverage manufacturing  60 bio-diesel production  237, 238–9 biodiversity, threats to  44, 186, 188 bio-fertiliser 249 bio-fuels  23, 35, 65, 149, 150, 157 biologically sustainable limit, fisheries  117, 118 biosecurity  183, 248 blackleg  162, 164 black soils  4, 107, 108, 110, 113, 114, 175, 221 Blagrove, Sarah  vii, 59–60, 141 blemished fruit  181 blue swimmer crab (Portunus armatus) 119, 120 bore water  81, 89, 92, 111, 173, 177, 180, 220, 250 Borlaug, Norman  35, 79 Bradfield, John  102 brand recognition  51, 185, 208, 209, 215, 248–50 Brazil  11, 20, 55, 73, 140, 167, 169, 170, 176, 188, 189, 194, 228, 237, 238 bread wheat (Triticum aestivum) industry  150, 151, 155 barley and  160 sorghum 159 bream  119, 204 breeding properties  168, 197 Brester, Gary  225 Brisbane  33–4, 126, 128, 181, 204, 224, 238, 239 Brisbane Line  67 broad-acre crops  65, 106, 164 broiler chickens  191, 192, 194 Bt (Bacillus thuringiensis) cotton  230 bulk grain  151, 165 Burdekin Dry Tropics Region  188, 246 Burdekin River  102, 169, 179 Bureau of Meteorology  102, 243 Burnett Region  173, 246 ‘buy Australian’ campaign  250

Index

by-products sorghum industry  158 sugar-cane industry  189 Cairns  47, 126, 171, 188, 233, 235 calcareous soils  113–14, 115 California  69, 183 Canada  11, 24, 166, 185 canola industry  164 wheat industry  150 canned products  48, 180, 181, 207 canola (Cruciferae) oil  54, 153, 162, 164–5 GM and  136 Cantwell, Sarah  viii, 112, 116, 141 carbohydrates  150, 151 carbon dioxide emissions  105, 106, 144, 237 Caribbean region  20, 30 carrots  183, 186 case study: Atherton Tableland  233–6 catchments Australia 91–2 beef cattle industry and  169, 171 cattle grazing  37, 46, 91, 92, 169–75, 244 export bans  78 celery  183, 186 Central America  30, 45, 159 central Australia  91 Chaffey brothers  183, 184 Channel Country  111, 174–5, 220 Channel Isles  211–12 Charleville  81, 177 cheese exports  215 chemical pollutants  246, 247 cherries  180, 183, 186, 250 chicken meat industry Australia 191–7 dairy farms and  214 chickpeas  190, 249 China  2, 3, 15, 24, 25, 35, 36, 49, 50, 54, 56, 57, 65, 75, 78–9, 83, 112, 164, 166, 167, 168, 181, 182, 185, 189, 194, 207, 209, 228 Asia and  28 change factors in  80–1 cherries exports to  180, 183 dairy exports to  214, 215 egg production  199 GM food and  133, 137 grains production and  149

horticultural exports and  186 investment levels  82 meat imports  172, 175, 176, 178 population control  44 revolutions 78 seafood demand  208 sorghum exports to  157 trade with  18–19, 26, 32–3, 55, 66, 70–1, 76–7, 78, 143, 208 wool industry and  222, 224 Chinese New Year  186, 208 Chiomey, Jacques  viii circumstances changes, exports and  77–81 citrus fruits  180, 181, 182, 186, 234, 235 Civil War (US)  6, 227 classification barley  161, 162, 163 soils 109–11 sorghum 159 wheat 153–5 clay soils  161, 229 ‘clean and green’ image  58, 73, 77 beef industry  168 China and  32, 33 horticultural products and  186 milk and  215 planning for  243–51 climate Australia  3, 89 beef cattle industry and  169 food supplies and  47 irrigation and  94 variability  37, 60, 98 wheat growing and  152–3 climate change  37, 41, 58, 98 clothing exports  74, 229 coal mines  128, 129, 243 coal seam gas (CSG) industry  80, 107, 129–31 see also fracking (hydraulic fracturing) coastal areas  217 pollution and  188 rainfall and  90–1 coffee growing, Atherton Tableland  235 command economy  26, 41 Commonwealth Scientific and Industrial Research Organisation (CSIRO)  59, 68, 110, 112, 162, 228, 237

261

262

Australia’s Role in Feeding the World

comparative advantage, Australia  73–5 competitive producers  75–7, 215 conservation values, cultivable land and  43, 88 conspicuous consumption  30, 33 consumer preference changes  56 chicken meat  196 fish 205–6 GM foods and  137 contour banks  108 Cooktown  91, 188 Cooper Creek  174, 177 coral reefs  118, 120, 169, 188–9 coral trout (Plectropomus leapardus) 120, 121, 208 corn (maize) industry  35, 36, 190, 237, 249 GM and  134 cosmetic wastage, bananas  141–5 cost–benefit analysis  42, 45, 92, 247–8 beef cattle industry  173 irrigation  94, 96 Ord River scheme  68 solar water heating  239 water supplies  47 wheat industry  156 costs 24 banana industry  143–4 fertilisers and  245 grains supply chain  166 horticultural export markets  185 irrigation 100 water provision  110–11 cotton (Gossypium) industry  6, 54, 60, 61, 228, 229 Australia 227–31 GMO and  135 irrigation and  95, 96 cottonseed  164, 229 crab fisheries  120, 121, 206 Creutzfeldt-Jakob disease (CJD)  134–5 cropland barley 162 loss of  126 new methods  63 rainfall and  47 wheat 151 crop rotation  158, 190, 229

crown-of-thorns starfish (Acanthaster planci) 188–9 cultivated land limits of  110 proposals for  42–3, 44–5 cumulative impacts, mining  129 cyclones  60, 90, 187, 188 Daintree Forest  58, 139 dairy industry  6, 54, 55, 59, 61, 65, 70, 75, 107, 169, 170, 211–15, 233, 245 egg production and  200 GM and  137 irrigation and  95 dairy products  16, 76, 77, 150 Atherton Tableland  234 Dalby  65, 152, 153, 238 dams  42, 47, 92, 180 building of  227, 230, 247 Ord River  67–8 proposals for  100–2 Darling Downs  96, 107, 108, 110, 153, 157, 222, 223, 238 Darling River  81, 126, 228 Darwin  67, 69, 174, 248 Darwin, Charles  11, 12, 105, 173 data collection, agricultural land use  94 Davidson, Bruce  68 Dawson, Robert  33 Deakin, Alfred  183 decomposers  104, 105, 106 Deguara, Gerry and Barb  249 demand, food supplies  23–34 de Miranda, Juliano  viii Denmark  208, 215 Department of Primary Industries and Fisheries (DPI&F) (Queensland)  143, 145 dependency theory  15 desert country  36, 111, 115 sheep industry and  220 Diesel, Rudolf  238 dietary changes  14, 15, 16, 17, 33 beef and  175 dietary fibre, barley  161, 162 differential water usage  95–8 Dimbulah  233, 236

Index

disease resistance canola 164–5 seafood consumption and  208 sorghum 159–60 wheat 155 distribution dairy cattle  211, 212 irrigation 96 Ditton, Hannah  vii, 141 drainage basins  91–2 dried fruits industry  88, 181 drinking water, poverty and  21–2 drip irrigation  63, 96, 97, 98, 99–100, 102, 186, 189, 190, 246, 250 drought  60, 90, 93, 243 agricultural prices and  38 barley and  161 beef cattle industry and  167–8, 177 cotton industry and  227, 228 grazing and  109, 111 sheep industry and  220 dryland crops  60, 152, 227 dual-purpose breeds (sheep)  219 dumping  83, 181 Durack, Patrick  81 dust storms  103 East Africa  19, 42, 45 East Asia  42, 45, 150 eastern Australia, soils  110 Eastern Europe  42, 43, 45, 55, 215 eco-labelling 208 economics banana wastage  145 beef cattle industry  169, 171, 175, 176 fisheries 204 irrigation and  94 self-sufficiency and  75 tourism 188 water efficiency and  98 wheat industry  155, 169 economies of scale  225, 228 eco-tourism  44, 53, 56, 58, 62, 250 eco-wool 224 education  53, 56, 58 India 79 egg industry  5, 6, 62

Atherton Tableland  235 Australia  192, 199–201 Egypt  19, 22, 28, 157, 191 El Niño  37, 90, 117, 177, 188 Emerald  152, 228, 230 endosperm, wheat  150 Engel’s law  18, 33, 66, 80 environment  101, 184, 244 fisheries and  208 reputation and  248 environmental damage  129, 205 banana wastage and  144–5 dietary change and  15–16 fertilisers and  245 soils 104 erosion  104, 106, 109, 244, 246 ethanol  149, 157, 189, 237, 238–9 Ethiopia  19, 49, 157, 159 Europe  33, 35, 60, 143, 164, 224 egg production  200 exports to  66 population decrease  26 European settlement in Australia agriculture 243 cotton industry  227–8 dairy farming  211–12 Darling Downs  107 sheep industry  218 wine growing  184 European Union  18, 20, 24, 29, 55, 66, 75, 140, 167, 208, 209, 215 evaporation rates  91, 93, 94, 102 exchange rate, seafood exports and  207, 208 exotic fruit  180, 182–3, 235 exponential population growth  12 export markets  49, 62 barley 160 beef industry  167, 168–9 canola 164 chicken meat  197 China 55 cotton industry  228–9 dairying  211, 214 fisheries 207 grains industries  150, 154, 156, 165–6 horticultural products  185

263

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Australia’s Role in Feeding the World

export potential, sugar industry  189 extensive grazing  93, 111, 116, 168 externalities  62, 63, 107 analysis of  245, 247 banana industry  144 dams 101 GM food  136 grains industry  166 irrigation 184 mining process  128 extreme poverty  21–2 Fairbairn Dam  179–80, 228 fallow system  249 farming machinery, invention of  59 farming, unintended consequences  2, 62 farm investment  99–100 farm labour  24 farmland fracking and  130 land degradation and  40–1 loss of  126–7 protection of  4 wastage 64 water rights and  47 farm productivity  61 farm size dairying 212 horticulture 179 modernisation 214 wheat and  149–50 fast food chains, China and  33 faulty telescope faculty  46, 47 feed costs, chickens  196, 200 feed grain  65, 159 feedlots  167, 168, 170, 173, 175, 176, 178, 245 feral animal pests  179 fertigation  96, 98, 186, 189, 245 fertile eggs, importation  196 fertilisers  42, 63, 87, 96, 98, 100, 104, 107–8, 110, 164, 171, 175, 187, 188–9, 204, 245–6, 249 fine-wool industry, Australia  218, 219, 224 finfish  119, 120, 207 First Fleet  204, 218 fisheries  4, 6, 102, 112, 117–22, 203–9 fish species, production statistics  206

Fitzroy Basin  169, 171, 172, 246 Flinders River  101, 102 flood irrigation  94, 97, 100, 189, 250 flood plains beef industry and  174–5 cotton and  229 floods  60, 90, 187, 188, 246 flower industry  49, 50, 234 Food and Agriculture Organization (FAO)  13–14, 24–5, 145, 170 ‘food bowl of Asia’  12, 54, 183 food chain, soils  105 food contamination  18, 19, 32–3, 141 food costs, urbanisation and  127 food demands China 80–1 global  26, 35–51, 76–7 income growth and  30–2 population growth and  11–22 production constraints  1 food exports  73, 74 Australia  54–6, 61–2, 243–4 circumstances change and  77–81 food fashions  26 food imports  22, 40, 75 food labelling laws  135 food price increases  48, 49 food processing  60, 70 food security  42–3, 74–5, 137, 209 fishing 203 Indonesia 77 Latin America  20 poor countries  48 ‘food versus fuel’ debate  237 food wastage  4, 13, 16, 17, 64–5, 140–2, 145, 146 foreign investment agricultural land  40 Australia 81–2 dairying 214 forests  39, 43, 60 fossil fuels, replacements for  237–40 fracking (hydraulic fracturing)  80, 129–31 France  15, 19, 112, 128, 189, 208 free-range foods  35, 42, 170, 192, 193–4, 195, 201 free trade negotiations  70, 82, 83 fresh fruits and vegetables, export markets 185

Index

freshwater fisheries  203–5 frozen meat  167, 196 fruit fly  181, 183 fruit industry  55, 90, 179, 181 Atherton Tableland  234–5 exports  61, 180, 186 irrigation and  95 fungicides  155, 162, 165 future potential  176 beef cattle industry  177 grains industry  166 seafood industry  207–9 Gallegos, Danielle  viii gas pipelines  130 General Agreement on Tariffs and Trade (GATT) 82–3 gene technology  136, 137 genetically modified organisms (GMOs)  4, 35, 37, 133–8 chicken industry  195 cotton 230 support for  137 Germany  51, 183, 199, 208 Gilbert River  92, 101 Gini coefficient  80 Gladstone  120, 130 global markets  15 beef production  176 Brazil and  20 chicken industry  194 egg production  199 food supply  2, 35–51, 250–1 fruit industry  180 hunger and  13 global warming  75, 143, 144 glyphosate  135, 158 gold  57, 59 Gold Coast  91, 112, 129, 227 golden rule principle  245 gold rushes  53, 151 Goldsborough Mort  174 Gondwana World Heritage Area  58, 91, 250 Goodwin, Daisy  213 Goondiwindi  152, 163 Goulburn Valley  88, 183 government funding  203 banana wastage and  145–6 cost–benefits  247, 248, 249

dams and  101, 102 infrastructure and  64 northern development and  67, 68 water allocation and  92, 98 Graham-Taylor, Susan  68 grain class (wheat)  153 grains industries  5, 59, 155, 159, 165, 173 Australia 149–66 beef cattle and  167 chicken industry and  193, 194, 195 harvesting 107 production  14, 25 grandparent chickens  193 grape growing  95, 180, 183, 184 grasslands  39, 43 grass seed, Atherton Tableland  234 grazing land  44, 60, 65, 88, 109, 112, 156, 244 Australia 46 mining and  128 Great Barrier Reef  1, 5, 53, 56, 58, 62, 63, 66, 96, 101, 107–8, 109, 137, 169, 171, 179, 186, 208, 245, 247, 248, 249–50 pollutant reduction strategies  246 threats to  187–9, 190 Great Dividing Range  81, 91, 92, 107, 114, 152, 169, 233 great-grandparent chickens  192, 193 green cane harvesting  109 greenhouse gases  128, 237, 238, 243 green manure  108, 244, 250 Green Revolution  35, 36–7, 79 Gregory, Augustus  173 grid-connected solar power  239 gross value of irrigated agricultural production (GVIAP)  93 groundwater  88, 91, 92, 107 Group of 20 (G20) Summit 2014  34, 208 growing periods oilseeds 164 wheat 152–3 Gulf of Carpentaria  92, 101, 102, 110, 120, 121, 204 Gunn, Bill  69 Gurindji workers strike  174 Gwydir River  228 Hardisty, Jane  103 Hardy, Frank  174

265

266

Australia’s Role in Feeding the World

Hartzer, Keeley  213 harvesting chickens 193 oilseeds 164 Hawksford family  222–3 hay growing, Atherton Tableland  234 health benefits, seafood  206 health scares  133, 134 herbicides  135, 165, 189, 249 herd animals  43 Hesp, Chris and Sonya  250 Hobart  120, 211 hobby farms  173 Hong Kong  26, 75, 80, 180, 186, 197, 207 horticulture industry, Australia  5, 70, 179–86 Human Development Index (HDI)  1, 57 human health risk, GMOs and  135 humid zone soils  113, 114 Humpty Doo  68–70, 238 humus (soil)  105–6 Hundloe, Tor  vi–vii, 213 Hunter Valley region  128, 129 hydro-electricity 239 hygiene, chicken industry  193 ice-caps 88 immigration  43, 61 improved pastures  170–1 income level  18, 24 food consumption and  17, 18 food distribution and  30–2 India  30, 75, 83, 140, 157, 159, 164, 167, 188, 189, 191, 208, 224, 228, 230 dietary demand change  26, 27, 77 economic changes  78, 79 grains production  149 population control failure  44 rape seed and  162 Indian Ocean  90 Indonesia  27, 28, 70, 75, 165, 180, 228 beef and  168 self-sufficiency and  76, 77, 78 industry restructure  204 inequality China 80 food distribution and  13, 29 infrared (NIR) technology  153

infrastructure costs public funding of  64 water 108–9 innovation, sugar-cane industry  190 insects  33, 104–5 canola and  165 cotton and  228, 229, 230 intensive agriculture animal production  60 Atherton Tableland  233–6 egg production  200 grazing  93, 219 inter-annual variability (weather)  90 Intergovernmental Panel on Climate Change (IPCC)  143, 238 international trade  3, 50–1, 81, 214 internet 80 investment levels  50 India 27 irrigation 63 Iran, sanctions and  78 Iraq (Mesopotamia)  36, 40 irrigation  38, 60, 63, 68, 88, 89, 91, 92, 93–5, 108, 127, 173, 186, 245, 246, 250 Atherton Tableland and  236 canola and  164 cotton industry and  227–30 efficiency of  98 horticulture and  179 infrastructure 96–100 land under  95 Murray–Darling Basin  183–4 proposals for  56, 102 sorghum and  157 sugar-cane industry and  189 wheat industry and  152, 153, 156 Islamic (halal) food requirements  225 Italy  181, 208, 222, 224 itinerant workers, horticulture  179 Japan  15, 40, 70, 75, 80, 83, 140, 164, 168, 182, 185, 186, 206, 207, 208, 222, 228 exports to  55, 57, 66 investment levels  82 trade deficit  73 Jersey cows  212, 213, 215 Joseph Bonaparte Gulf  173, 204

Index

Kentucky  222, 223 Keynes, John Maynard  12 Kidman, Sidney  174 Kimberley  67, 115 King Ranch  82 Korean War  58, 152, 222

Lucas, Willy  250 lupins  149, 153 lychees  180, 181, 235 Lynas, Mark  137 Lyne, Chris  249 lysine  193, 250

labour productivity  61, 230, 244 Lake Eyre  92, 102, 111, 116, 171, 174 Lakes Entrance  119, 120 lamb meat industry  6, 26, 54, 70, 173, 219, 224, 225 land degradation, farm practices and  40–1 land grants, wool industry  218 landless poor, India  27 land ownership, global  48–9, 50 land rights movement  174 land use Australia  60, 65–6 availability 38–46 chicken meat industry  197 restoration 128–9 rezoning 127 Langlo River  81–2 La Niña  37, 90, 117, 177, 188 Latin America  82, 157 food consumption changes  20 population growth  30 Lawson, Henry  177 laying hens  199, 200 leached soils  113 legal rights, mining  131 legume growing  106, 108, 190, 234, 249 Lewis, William Arthur  80 life-cycle assessment (LCA)  143, 144 lime  164, 204 Linkletter, Art  69–70 live cattle exports  54, 76, 225 live sheep exports  224, 225 livestock medicine  37 livestock production  17, 21, 157, 159, 229 lobster industry  80 ‘lock the gate’ protest movement, fracking and 130–1 lodging  157, 160 long-lasting milk  215 long-wool sheep  219 Lowe, Steve  139

macadamia nuts  5, 180, 182, 235 Macarthur, John  126, 218 Mackay  163, 188, 199, 238, 246 Macquarie Island  117, 118 mad cow disease (bovine spongiform encephalopathy) (BSE)  134, 169 maize growing  149, 157, 159, 234, 249 Malanda milk factory  233, 234 Malaysia  27, 28, 165, 180, 186 malnutrition  13, 21–2 Malthus, Thomas  11, 12, 27 management skills soils and  108–9 wheat industry and  153 mangoes  180, 181, 182, 186, 234–5, 248 manure  106, 108 Mareeba  233, 236 marginal returns  61, 74, 94 food production and  39–40 mariculture  117, 203, 208 market forces  25, 47, 126 reversibility and  244 sheep industry and  219, 221 water and  98 market gardens  126, 151, 179 Mary Valley  215, 246 Mayaki, Ibrahim Assane  19 McDonald’s  33, 238 McEwen, John  69 McHugh, Evan  82 McKay, H. V.  59 McMahon, William  67 McPhee, Daryl  viii meat consumption Australia 224–5 increases in  18, 19 meat industry  32, 59, 219–20 continuity of  14, 15, 16 Mediterranean climate  152, 184 Mediterranean region  22, 28, 40, 110, 162 medium wool  219, 224

267

268

Australia’s Role in Feeding the World

Melbourne  99, 151, 204, 205 melons  186, 235 Menzies, Robert Gordon  67, 69 merino sheep industry  58, 65, 111, 217, 218, 219 Mexico  20, 164, 189 middle classes Asia 28 China  54, 168, 186 food choices  15–18, 31–3, 35 GM foods and  133, 137 grains industry and  166 meat demands  176 North Africa  28 Middle East  24, 36, 49, 150, 224, 225 exports to  66 wheat growing  151 Mildura  88, 183 milk bottle manufacture  234 milk chocolate  215 milking 212 milk products, China and  75 Millaa Millaa  233, 236 Mill, John Stuart  12, 13 mill mud  189, 190, 250 mining industry  53, 60, 62, 77, 194, 195, 251 agricultural land use and  128–31 reliance on  55, 56, 57 Russia 41 minor defects, bananas  142, 143 Mitchell grass  110–11, 169–70 mixed farming  106, 169, 235 modelling, climatic factors  99 modified pastures  170–1 Modi, Narendra  26 monoculture 35 Monsanto  135, 136, 137 monsoons  37, 90, 102, 109 Moreton Bay bugs (Thenus spp.)  64, 120, 121, 208 motor vehicle industry, failure of  60 Mount Kosciuszko  92, 99 Mount Morris  82, 177 mud crab (Scylla serrata)  120, 121 multinational agribusiness  48, 49–50 Murray–Darling Basin  3, 46, 91, 92, 101, 110, 113, 183, 186 Murray–Goulburn region  179

Murray River  64, 81, 88, 115, 183, 185 Murrumbidgee River  64, 115 Muscat, Joe and Christine  249 mussels  117, 207 mutton industry  219, 224–5 mycorrhizal fungi  115, 159 Namoi River  114, 227, 228 national parks  44, 45 national resource management (NRM)  249 natural capital  207 natural farming  65, 105, 170, 244 natural fertilisers  230 natural fibre wool  222 natural variations, agriculture and  36, 37–8 nectarines  183, 186 nematodes  104, 105 net present value  247, 248 New England  61, 219, 222, 223 New South Wales (NSW)  61, 88, 91, 96, 110, 113, 114, 115, 116, 128, 131, 139, 140, 152, 154, 156, 157, 161, 164, 165, 166, 169, 170, 183, 184, 185, 187, 204, 205, 208, 218, 219, 222, 228, 235, 238 fisheries 120 horticulture 180 New Zealand  6, 24, 28, 42, 45, 55, 73, 181, 207, 215, 224, 225 cultivable land  43 exports from  244 exports to  66 nitrogen  104, 105, 106, 112, 161, 189, 229, 244, 249 deficiency of  153, 162 wheat and  153 nitrogen fertiliser  35, 37, 96, 158, 164 no-liability agreements  136 non-cultivated land  39 non-market goods and services  247 non-wild catch fisheries  117 North Africa  19, 28, 43, 224 North America  30, 42, 45, 140, 151 Northern Australia  68 cotton and  230–1 development proposals  66–70, 101 net agricultural gain  248 Northern Europe  20, 43, 201

Index

Northern Prawn Fishery (NPF)  119, 120, 121, 204 Northern Territory (NT)  58, 68, 69, 113, 115, 117, 118, 121–2, 140, 157, 169, 173, 180, 208, 238 north Queensland, banana industry  139, 140, 142, 143 Norway  57, 206, 215 nuclear power  129, 243 Nullarbor Plain  61, 115 Numinbah  91, 213 nursery plant growing  234 nutrients  106–8, 109, 190 nutrition bananas  142, 144 barley 161 eggs 200–1 soils 104–5 wheat 153 oats  108, 149 Office of the Gene Technology Regulator  155, 230 offshore fish-farming  117 oilseeds industry  149, 162, 164–5 on-farm storage  165 open-cut mining  128 opportunity costs  39–40, 50, 62–4, 74, 125, 247 orchards  46, 179, 181 Ord River Irrigation Scheme  3, 67–8, 99, 101, 110, 179, 228, 247, 248 organic beef industry  111, 167, 172, 174, 175 organic chicken industry  192, 193–4, 195 organic farmland  104, 105, 112, 135, 136, 230, 244, 248, 250 organic foods  26, 137, 215 Ottone, Michael and Peter  249 overfishing 205 overgrazing  41, 109, 170, 220, 244 over-irrigation 40–1 oysters  117, 203, 204, 205, 206 Pacific Ocean  90, 117 Pacific oyster (Crassostrea gigas)  119, 120, 121 paddle steamers  81

Pakistan  18, 27, 30, 164, 189, 228 palm oil  49, 238 papaya  181, 186, 234, 235 parasitoids 160 parent chickens  193 Parramatta (Rose Hill)  126, 218 pastures 211 beef cattle  171–5 wool industry  222 Paterson, A. B. (Banjo)  69, 87, 92, 113, 173, 217, 218, 220, 225 peak oil  80, 238 peanuts  235, 238, 249 pears  180, 181, 183, 186 peasant farmers, agribusinesses versus  48 Peking duck, importation of  32, 197 perfect elastic supply  31 Peru  117, 203 pesticides  187, 189, 246 pest resistance sorghum 160 wheat growing  155 Philippines  27, 28, 48, 49, 140, 197 Phillip, Arthur  218 phosphorus  104, 105, 107, 112, 153, 158, 161, 189, 229 photovoltaics 239 pig feed, dairying and  214 pig meat industry  175, 245 Pigou, Arthur  46 Piketty, Thomas  79 pineapple growing  180, 234, 235 plantation forestry  49, 234 plant experimentation  36–7, 155 Poaceae  156, 160 poddy calves  212, 213 podsols 113 political tensions Africa 14 land ownership and  49 Murray–Darling Basin and  91–2 pollution reduction strategies  245, 246 population decrease  20–1 population growth  61 control of  44 food production and  11–22, 24–30, 42–3 grains industries and  149 poverty and  28, 29

269

270

Australia’s Role in Feeding the World

pork industry, Atherton Tableland  234 Port Lincoln  117, 119 potassium  104, 107, 108, 229 potato growing  36, 180, 186, 235 poultry industry  5–6, 175, 191–7, 234, 245 poverty causes of  22, 28, 29 East Asian countries  27–8 food exports and  20 India 27 land ownership and  50 prawn industry  64, 102, 117, 119, 120, 121, 206, 207, 208 precision agriculture  249 price fluctuations  31, 63 beef industry  171–3, 176 chicken meat industry  193, 196 China and  80 cotton 228–9 dairy products  214 fruit 180 global  24, 150 seafood industry  207 sheep meat  225 sorghum 157 sugar-cane industry  187, 188 wheat 152 wool industry  221 prime lambs  219 processed food  17 chicken meat  196 exports 55 milk products  214 production capacity  1 Atherton Tableland  236 beef industry  176 cotton industry  228, 229 fisheries 205–6 food 1 fruit 181 horticultural export markets  185 production function, water  94 production methods chicken meat industry  195 cotton growing  229–30 production possibilities  63, 74 productivity 244–5 dairying industry  214

grains industry  166 protected areas  43, 44–5, 60, 125–31 quality reputation  185 quarantine  192, 196 Queensland  48, 60, 61, 65, 66, 82, 91, 96, 99, 102, 107, 108, 110, 112, 113, 114, 115, 116, 118, 125, 128, 129, 130, 131, 139, 152, 154, 155, 157, 161, 163, 165, 166, 169, 171, 173, 174, 183, 185, 187, 204, 208, 215, 217, 219, 222, 227, 228, 233, 235, 238 cotton 227 fisheries 120 horticulture 180 Quirk, Amylee  213 railways 64 rainfall 56 Atherton Tableland  236 Australia 89–91 beef industry  177 Channel Country and  174 cotton and  230 sheep industry and  220 unreliability  37, 87, 88, 91, 99, 108, 219 wheat and  156 rain-fed agriculture  156, 177, 246 rainforests  44, 91, 233 rape seed (Brassica rapa L.)  54, 153, 162 Ravenshoe  233, 236, 239 red meat consumption  75 red soils  113, 114, 115, 161 refrigeration  59, 79 regional population growth  25–30 Reid, Norm  249 Reinaudo family  249 reputation principle  248–50 research, beef cattle industry and  177 reserve price wool  221 resource earnings, distribution of  57, 58 revenues, wine growing  184–5 reversibility principle  46, 244–5 Ricardo, David  12, 70, 74 rice growing  36, 37, 38, 70, 149, 157 Humpty Doo  69–70 irrigation and  95 Ridley, John  59 risk-averse strategies  177

Index

river flood-plains  40, 112 rivers  88, 125 robotic milking  6, 214 Rockhampton  91, 118, 129, 169 rock lobster (Panulirus cygnus)  119, 121, 206, 207, 208 Rose, Wally  91 rotation crops  152, 153, 155, 162, 164, 249 Roundup 135 Roy, Arundhati  27 run-off pollution  63, 100, 108, 169, 171, 179, 186, 187, 245, 246, 248 rural populations  19, 20, 127 Russia  41, 42, 43, 45, 156 agricultural decline  11, 12, 41 food imports  75 revolutions 78 sales volumes, eggs  201 salinity  41, 62, 130, 179, 184 salmon  117, 205 salmonids  205, 206 sardine industry  119, 121, 206, 208 saucer scallop (Amusium ballioti)  119, 120 savannah  44, 92, 101, 111, 112, 169–70, 177, 233, 248, 250 scale economies  37, 181 scallop (Pecten fumatus)  119, 206, 207 Scandinavia  51, 128 scheduling (farming)  100 Schroeder, Dick  213, 215 seafood industry  6, 54, 70 Australia 203–9 wastage 64 seasonal crops barley 161 control of  93–4 fruit 181–2 sorghum 157 wheat 155 Second World War  42, 67, 82, 152, 157, 174, 184, 212 seed planting (wheat)  153 seeds, gene technology and  136 selective breeding  36, 56, 134 chickens 192 merino sheep  218 sheep meat  225

self-sufficiency  62, 70–1, 74–5, 76, 77, 78 semi-arid lands  42, 60, 61, 90, 91, 108, 111, 112, 177, 243–4, 250 grazing and  38–9 soils of  114–15 separator  212, 214 shale oil  238 see also fracking Shark Bay  58, 119 Sharma, Shayal  viii, 141 sheep industry  37, 39, 46, 61, 65, 81, 107, 174, 180, 244 Australia 217–25 extent 171 nineteenth-century 81 sheep jackets  222, 223, 224 sheep meat industry  5, 55, 75, 76, 77, 218, 224–5 short-wool sheep  219 Simpson, Scott and Maria  249 Singapore  26, 180, 186, 197, 238 skip row planting  249 Slugget, Rob and Maree  249 small producers  83, 200 Smith, Adam  12, 70 Smith, Clive and Margaret  222 snowmelt  92, 99, 184 Snowy Mountains Scheme  3, 64, 92, 99, 183 sodium chloride  112 soft drinks  189 soil creatures  105, 106 soils  56, 103–16 Australian 3–4 erosion of  109 formation of  103–4 nutrients 87 pollution of  41 productivity 61 properties of  105–6, 249 taste of  112 variability of  249–50 soil types  24, 113–15, 156, 157 Solakovic, Alex  viii solar farms  7, 129, 239 solodic soils  114, 115 solonised brown soils  114–15 sorghum (Sorghum bicolor)  36, 46, 65, 149, 150, 156–60, 168, 193, 229, 238

271

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Australia’s Role in Feeding the World

South Africa  185, 197, 218, 219 South America  42, 45, 51, 185, 224 South Asia  21, 25, 42, 43, 66 South Australia (SA)  46, 59, 88, 110, 114, 115, 117, 152, 154, 156, 161, 165, 166, 169, 171, 174, 183, 185, 220 fisheries  119, 121 horticulture 180 South-east Asia  42, 49, 66, 165, 181 Southern and Eastern Scale-fish and Shark Fishery 204–5 southern bluefin tuna (Thunnus maccoyii)  119, 121, 206, 207 Southern Oscillation  90 southern rock lobster (Jasus edwardsii) 119, 120, 121 South Korea  18, 26, 66, 75, 83, 168, 181, 182, 186, 228 South Pacific Region  17, 49, 197 sovereign wealth funds  57, 82 sowing periods  161, 164 soybeans  36, 158, 164, 190 Spain  208, 218 spray irrigation  63 spring crops  155, 161 Springsure  172, 222 Stanthorpe  183, 185, 219, 222, 223 staple crops  37, 157 state capitalism, China  26, 78–9 St George  152 stocking densities  177, 195 stock routes  174 stone fruits  180, 183 stony deserts  113, 115 storage systems, grain industries  165 stream-bank vegetation  247 strong wool  219, 224 stump-jump plough  59 Sub-Saharan Africa  11–12, 14, 21, 24, 38, 50, 51, 82 crop failures  40 food needs  137 population trends  29–30 war and  42 subsidies 63–4 subsistence farming  21, 45 Africa  14, 29, 40 Sudan  49, 157, 159

sugar beet  36, 189 sugar-cane industry  5, 50, 54, 55, 63, 64, 66, 70, 76, 78, 90, 102, 108, 109, 126, 187–90, 233, 237, 245, 248, 249–50 Atherton Tableland  235 ethanol production and  238 Sukumaran, Murujan  77 sulfur  104, 105, 107, 161, 164, 229 summer crops  157, 180 superfine wool  219, 222–3, 224 supermarket retailers  181 bananas and  140 chicken meat and  196 seafood and  204, 207 superphosphate  107, 113, 115 supply reliability  23–34, 31, 156, 165–6, 167 supply side cultivable land  45 opportunity costs  62–4 surface water  63, 91 Surfers Paradise  6, 227 sustainability  45, 46, 77, 127, 247 chicken meat industry  197 GM foods and  137 mining and  129 sugar-cane industry and  190 water and  47 Suzuki, David  73–4 Switzerland  51, 215, 224 Sydney  120, 151, 204, 205, 222 Sydney Harbour  204, 228 synthetic fertilisers  104, 107–8 synthetic fibres  221, 222 table grapes  66, 186 Atherton Tableland  235 exports 180–1 Tama, Joe  250 tariff reductions discussions  13, 70, 83 Tasmania  46, 51, 58, 100, 110, 113, 117, 129, 152, 156, 169, 185, 205, 206, 209, 219, 250 fisheries 120 horticulture  180, 183 tea growing  49, 235 temperate area fruits  183 temperature  89, 90 Thailand  27, 55, 165, 180, 186, 189, 207, 228 Thompson, Paul  137

Index

Thylungra station  81, 174–5, 177, 220 tillage methods  249 timber industry, Atherton Tableland  236 tobacco growing  49, 50, 236 Todd River  99 tomatoes  180, 186 GM and  135–6 tourism industry  58, 63, 108 economics of  53 Great Barrier Reef  188 Townsville  67, 91, 188, 237 trace elements  104, 112 trade agreements  70, 83 traditional agriculture  45 transport costs  127 transport facilities, grain industries  165 trawl fishing  120, 204 trickle irrigation  250 trucking, beef industry and  167–8 Tully  91, 102, 139, 181 tuna  117, 206 Ukraine  41, 156, 166 underground resources, Commonwealth law 131 underground water  107, 130, 131 unintended consequences, farming and  62 United Kingdom (UK)  32, 75, 151, 185, 192, 197, 208, 227 export market  55, 56, 222 mad cow disease and  134 sheep breeds from  219 United Nations (UN)  13, 57, 145, 146 United States of America (USA)  11, 18, 23, 33, 35, 55, 64, 73, 75, 80, 112, 166, 169, 170, 176, 181, 183, 185, 186, 189, 192, 194, 199, 207, 208, 224, 228, 237, 238 cherry imports  180 CJD and  135 drip irrigation  100 exports to  66 feedlots 175 fracking  80, 130 GM foods and  133, 135–6 grains production  149 investment levels  82 population growth  26 sorghum and  157

wheat industry  150 universal model (aspirations)  16–17 upstream ports  125–6 urbanisation  60, 125 food consumption and  17 land loss and  40, 46, 56, 60 water usage and  47 veal consumption  175–6 Veblen, Thorstein  30, 33 vegetable growing  180, 181 Atherton Tableland  235 irrigation and  95 vertical integration  82, 194, 196 Victoria  61, 88, 100, 110, 114, 115, 152, 154, 156, 161, 165, 166, 169, 170, 179, 183, 185, 205, 211, 217, 238 fisheries 119–20 horticulture 180 Victoria Downs station  173–4 Vietnam  27, 28, 165, 180, 207, 224 vitamins  160, 194, 195 wage levels, China  80–1 Wallace, Alfred Russel  12 war African poverty and  29, 42 food supplies and  40 Ward, Ken  78 water allocation  46, 92, 98 water efficiency, cotton growing and  228 waterlogging  152, 184, 229–30 water recycling  108–9 water resources agriculture and  92 Australia 89 availability  61, 99 degradation 101 fracking and  130 infrastructure  38, 99–102 Murray–Darling Basin  183, 184 pricing 246 water usage  13, 24, 56, 95, 96, 98, 245, 249–50 Australia 87–102 bananas 144 cotton and  227, 229–30 management 38

273

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Australia’s Role in Feeding the World

ownership of  47, 102 pollution 62 pricing 98 reduction of  246–7 urban 126 Wave Hill station  174 weather patterns agriculture and  243 Australia 89–90 sheep industry and  219 sugar-cane industry and  187 weed control  160, 165, 229 Wee Waa  96, 227–8 West Africa  19, 42 Western Australia (WA)  60, 90, 110, 113, 114, 140, 152, 154, 156, 157, 161, 164, 165, 166, 169, 170, 180, 183, 185, 211, 225, 228 fisheries  118–19, 121 western king prawn  (Melicertus latisulcatus) 119 wet season  90, 111 Wet Tropics World Heritage Area  58, 91, 99, 187, 188, 233, 236, 246, 250 wheat (Triticum) industry  36, 37, 46, 54, 55, 59, 70, 75, 76, 78, 108, 149, 157, 159, 168, 169, 193 Australia 150–6 diseases 155 distribution 38 exports  65, 81 nineteenth-century 151 wheat–sheep belt  152 White, Amy  ix

whiting  119, 204 wild-catch fisheries  112, 117, 119, 121, 205, 208, 209, 250 Wimmera  88, 115 wind erosion  41, 104 wind farms  7, 239–40 wind patterns, Australia  89 Windy Hill farm  239–40 wine industry  54, 70, 115, 180, 185 Australia 184–5 exports  66, 250 soils and  112 winter wheat  155, 161 wool growing  6, 39, 54, 56, 58, 59, 60, 61, 65, 107, 126, 173, 176, 177 challenges to  222–4 decline of  152 nineteenth-century 220 production  42, 221, 222, 224 woollen fabrics, advantages of  219, 222 World Heritage Areas  5, 6, 44, 58, 91, 169, 189, 233, 250 World Trade Organization (WTO)  13, 82, 83 Yass  219, 222 yellowtail kingfish (Seriola lalandi) 119, 121 yield gap  37 young people, dairying industry and  212 zero tillage  109, 237 zinc deficiency  158–9, 161, 229