Norther Australia has the potential to develop into a key production hub for horticulture commodities such as bananas, mangoes, melons and avocados, according to modelling from the ANZ bank.
Released at this week’s Northern Australia Food Futures Conference in Darwin, the modelling suggests northern Australia’s agricultural sector could generate A$73bn in production by 2030 should the region secure an additional A$15bn in capital and 3 per cent productivity growth per year.
Northern Australian agriculture was worth approximately A$8.3bn in 2016/17 – just under 14 per cent of national agricultural production. The sector has long been dominated by cattle, which continues to be the region’s largest single commodity.
However, the ANZ report suggested a renewed focus on horticulture commodities is being driven by the promise of greater infrastructure spend.
“Attracting new investment and utilising it well will be core to the industry’s ability to expand its existing base and develop future opportunities in additional commodities such as aquaculture, tropical fruits and horticulture,” said ANZ’s head of business banking, Northern Territory and South Australia, Brendan Rinaldi.
To generate the additional investment and capital required, Rinaldi said northern Australia’s agricultural industry must demonstrate the region’s growth potential and benefits, especially those it has over southern Australia.
“With its relatively stable cost base, along with its proximity to Asia, large land mass, high rainfall and water resource developments, northern Australia presents an appealing agricultural opportunity to investors,” he added.
“Additionally, in comparison with southern Australia, land affordability can help achieve scale and free-up capital investment for key cash flow drivers such as productivity improvements and stock.”
Industry research, a more strategic approach to building and developing new markets and the adoption of ag-tech are also identified in the report as ways to improve farm-gate returns, attract new capital and increase productivity.
“Overall, northern Australia has a strong opportunity to forge a sustainable economic future in agriculture but the key is in broadening its commodity specialisation, maximising land arrangements, and investing in research and technology to attract much needed capital investment,” Rinaldi said.