NOTICE: Hard copies of the Australian New Crops Newsletter are available from the publisher, Dr Rob Fletcher. Details of availability are included in the
Advice on Publications Available.Peter Walmsley
Marketing and Communications Officer
New Industries Program
Agriculture Western Australia
3 Baron Hay Court
South Perth WA 6151
Telephone: 08 9368 3559
Facsimile: 08 9368 3791
Email: pwalmsley@agric.wa.gov.au
More than 175 delegates from around Australia met at the New Rural Industries Conference, held in Perth, Western Australia, 18-21 October, 1998.
The result was considerable progress along the path to a uniform 'national' approach to ensure Australia is well equipped to identify, support and capitalise on new industry opportunities.
The event was conceived and hosted by Agriculture Western Australia's New Industries Program in partnership with the Rural Industries Research and Development Corporation.
The Western Australian New Industries Program was established in 1996, in response to global changes in agricultural production, processing and marketing.
The strategic direction of the Program is determined by a Partnership Group consisting of people with business expertise in media, market research, computing, finance, hospitality, aquaculture and farming. They serve as an advisory board and play a key role in identifying potential opportunities for new industry development.
The group identified a New Rural Industries Conference as an integral process in fostering partnerships for the development of new industries for rural Australia.
The Conference included multi-media presentations, formal debate, keynote presentations and workshops on issues generated throughout the event.
The need for new agricultural industry development was thoroughly dissected and future directions for new industries in the Australian agriculture sector were discussed.
The following provides a brief overview of the key findings from the conference.
Why invest in new industries?
History has shown that as industries mature their terms of trade decline. This is particularly the case with commodity based industries.
Mature industries are price driven; producers are invariably in the position of being price takers with little control of their terms of trade. To stay in the game they can either continually reduce their costs, add value to the products produced or look to new products.
New industries have a higher margin potential and can differentiate their product in the market to have more control of their terms of trade.
It was noted that Australia is well recognised for having efficient production systems in its existing industries.
However, as world trade increases, the option of competing on cost alone will become more difficult. An industry can value-add its products to stay in the market but this may only be effective in the short term.
Once competitors further develop their processes and value-add to their own commodities, the industry once again competes on price.
It was acknowledged that we live in an era of technological advancement, with accelerated rates of change. In responding to this changing environment, new industry development will be an essential element in maintaining Australia's global competitiveness.
Changing social and economic conditions are driving significant shifts in the global food markets. In particular, affluent consumers are demanding more specialised high quality products and services.
This affluent sector is expected to rise significantly with an additional 850 million affluent people by 2010, offering vast new market opportunities.
New industry development is essential if Australia is to effectively capitalise on these markets.
Within a global market, staying with the status quo of established industries is high risk, and relying on incremental improvement is likely to provide low reward.
Other sessions
Four potential scenarios for the Australian agriculture sector and the role of new industries were considered, depending on:
Groups of university students from three centres across Australia presented their views of the future of agriculture and their intended roles in adding value to new industry development.
An underlying common theme of their presentations was the need to foster partnerships between 'new' and 'old' agriculture.
Market Pull vs Innovation Driven Industry Development in agriculture was debated and it was acknowledged that a fine balance between these approaches is required to successfully foster new industries.
Dr Meg Howe, Agriculture Western Australia's first New Industries Fellow presented her findings of new industries development through a community-driven regional development approach (the Crops for Southlands program in New Zealand).
Two case studies were presented:
We can learn a lot from looking beyond agriculture to see how new ideas are fostered into commercial reality.
The presentation from 3M Australia outlined how they have developed a culture that encourages and nurtures innovation.
Innovation involves taking risks.
Management needs to support, mentor and sponsor the investigation of new ideas. Innovators need to be comfortable with sticking their necks outs.
3M also acknowledged that building a culture of trust and continuous change needs a consistent approach over a considerable time.
The conference workshops discussed the following elements of accelerating new industry development:
Research and Development:
It was acknowledged that Australia is strong in basic and applied research for new agricultural industries but not effective at linking this research to market demands.
It was suggested that research and development needs to become more commercially focused with better linkages to markets.
Marketing:
Effective marketing was rare. The small size of the domestic market was not considered a major impediment but a mind shift to a business and market culture was needed.
To establish supply chain networks for all new products, more coordinated efforts are required from government agencies along with increased producer market knowledge.
Production:
Australia lacks world scale value-adding capacity but the focus again should be on the customer.
Financing:
This was highlighted as a major obstacle to new industry development.
There is currently inadequate seed capital to finance infrastructure and market systems for commercial development.
It is difficult to attract investment for industries where processing and marketing infrastructure and systems don't already exist.
There is also too much dependence on government funding and an unwillingness by the finance sector to take a long-term position on the financing of new agricultural products.
To achieve better financial support for new industries there needs to be a continued effort to educate the finance sector in the processes employed in developing new industries.
Strategic alliances should be established with agribusiness providers who have capital, vision and management structures to assist with rendering the new industry commercial.
A high degree of trust and a willingness to share rewards would be required to establish these relationships.
Future Directions
The conference highlighted significant challenges for the Australian agriculture sector.
New Industry development is a complicated science that involves a complex mixture of:
To progress new industry development it was agreed that Australia needs to develop a national approach to new industry development.
This concept is to be facilitated by a national body with its agenda encompassing:
Agriculture Western Australia's New Industries Program will be investigating and developing this concept further in partnership with Agriculture Fisheries and Forestry - Australia and the Prime Minister's Supermarket to Asia Council.
It is considered that another new rural industries conference should be developed to foster further development of networks and alliances and build on future directions for new industries. It is suggested that the conference be held biannually with another state driving the next event.
Proceedings are available on the New Industries Program website: www.agric.wa.gov.au/programs/new/
Hard copies can be ordered by contacting the Centre For New Industries Development:
Telephone: 08 9368 3999
Facsimile: 08 9368 3791
Cost: AUD15+2
Any claims made by authors in the Australian New Crops Newsletter are presented by the Editors in good faith. Readers would be wise to critically examine the circumstances associated with any claims to determine the applicability of such claims to their specific set of circumstances. This material can be reproduced, with the provision that the source and the author (or editors, if applicable) are acknowledged and the use is for information or educational purposes. Contact with the original author is probably wise since the material may require updating or amendment if used in other publications. Material sourced from the Australian New Crops Newsletter cannot be used out of context or for commercial purposes not related to its original purpose in the newsletter
Contact: Dr Rob Fletcher, School of Land and Food, The University of Queensland Gatton College, 4345; Telephone: 07 5460 1311 or 07 5460 1301; Facsimile: 07 5460 1112; International facsimile: 61 7 5460 1112; Email:
r.fletcher@mailbox.uq.edu.au[
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