Futurist Goran Roos outlines Australia’s food challenges.
FUTURIST Goran Roos has been named as one of the 13 most influential thinkers for the 21st century. The Swede is a global expert in industry sector strategy, íntellectual capital and innovation management. Roos is director of Innovation Performance Australia, a professor in strategic design at Swinburne University of Technology. He will be a keynote speaker at The Australian's Global Food Forum in Melbourne on April 15 on the futuretu e of food, farming and agriculture.
“We have to target the top 1 per cent of the 3.2 billion emerging wealthy and middle-class in Asia who willing to pay $300 a kilogram for wagu beef”
Goran Roos on the future of Australian food exports
Is Australian agriculture and food production in an interesting position, given growing Asian demand for food?
Absolutely. Australia has the capacity, already today, to produce food for around 60 million people. This means that we will never be the food bowl of Asia but instead we have the potential, given our excellent raw materials, to produce high-value food products and ingredients for the top 1 per cent of the Asian market that is willing to pay for excellent functional and/or luxury products. This is a fantastic opportunity to get out of commodity and low-end (low value-added) agricultural and food exports and into high-margin food production.
Where should Australian farmers, agribusinesses and food companies concentrate their efforts?
Asia is the key but it is important for all to realise that Asia is made up of many different markets with different food cultures, different preferences and different requirements. It is about identifying the key segment with its associated channels to market that will allow for a very profitable and growing business.
Can or should Australia be the food bowl of Asia, producing commodity food for the masses?
This is the wrong approach. We have to target the top 1 per cent of the 3.2 billion emerging wealthy and middle-class Asians who are willing and eager to pay $300 a kilogram for wagu beef or $2000 a kilogram for top-class tuna or $15 a litre for Australian lactose-free milk or $20 a kilogram for gluten-free bread. We need to use top-class raw materials in a global environment of scarcity to create luxury products, and our scientific know-how to create products for a rapidly growing market of individuals who are intolerant of lactose, gluten or other food components.
Should Australia allow the virtually unfettered sale of farmland to foreign companies and governments?
You do not want to sell the farm; once you have done it you lose control of any value creation in the country. Instead, you need to encourage investment in adding value outside the farm gate such as dairies or meat processing.
Is agriculture being given the right level of assistance and guidance needed to succeed and grow?
The success of an industry is basically up to its participants. Australia has a very high investment in basic research that, on average, provides a societal return of just under 30 per cent and a substantially lower investment in applied research with 10 times that return. You will need both, but the balance needs to shift. There also needs to be a higher focus on demand-side tools such as procurement, regulation and cooperation to drive firm innovation as opposed to the present supply-side tools of grants and tax credits. Government has an important role to play in providing a modern extension services to small farmers and firms as well as acting as a funder for expensive studies. For example, the government can pay $1m for an important study and then resell the result to 1000 smaller firms for $1000 each. Probably the most important thing government can provide is civic leadership; that is point out a long-term [preferably bipartisan] direction in which it wants the industry to develop so that industry gets the 10-20 year certainty needed to make major investments.
What technical and consumer trends will have a significant influence on food consumption?
There will be several trends such as genetically-matched food to maximise individual health, penalties on both the individual level (eg higher medical and insurance costs) and the firm level (tax) for consumption leading to obesity and the production of unhealthy foods. The replacement of grown agricultural products by produced or synthesised raw materials through bio-printing, stem-cell based production and microbial consortia engineering will be another mega trend. There will be also be a heightened distrust of some food sources that will have a big impact on food flows and, hence, the investment flows. Over the coming 20 years, there will be greater demand for agricultural land until the land and soil is replaced by alternative production means – food grown in vertical skyscrapers or synthesised food. Naturallygrown beef, for example, will become a luxury product for the few, replaced by “3D-printed” meat in products such as hamburgers made from synthesised protein strings for the many.
How can Australian agriculture best take advantage of changing consumer demand?
Be agile, maximise quality and minimise production cost. Maximise the value of the raw material by either scientifically-based value adding or scarcity-based value adding. Target key markets and maximise the value you can deliver so that you can ask for the highest possible price.
How different will food production become?
Very different if you go far enough into the future. We are already seeing an increase in urban food production with high-rise buildings being selfsufficient in terms of vegetables, for example. We also see that increased genetic understanding allows us personalised food as well as genetically modified agricultural products with higher yields and better characteristics. The processing part is being improved through microbial consortia engineering drawing on synthetic biology to produce food out of non-food raw materials.