Fu­tur­ist Go­ran Roos out­lines Australia’s food chal­lenges.

The Australian - The Deal - - Contents - In­ter­view by: Sue Neales Pho­to­graph by: Aaron Fran­cis

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.

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