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Are there any grains in the northern food bowl?

By Evan Jones - posted Tuesday, 3 September 2013

On the heels of sponsoring a Global Food Forum last April, the Australian newspaper has sponsored a discrete follow up in mid-August (the date is not reported). Opposition Finance spokesperson Andrew Robb, favourite son of the Australian, was again a favoured speaker.

Robb is reported on the 19th August as claiming that Australia needs decent-sized 'national champions' to foster an escalating level of production and exports in a competitive global economy. ('We are an oligopoly economy: Robb'; all cited articles unreferenced are from The Australian) Thus oligopolistic industries have to be accommodated as a necessary evil if such national champions are to thrive, with an assertive competition policy to keep them honest.

Robb is on the political front line of the push to make agriculture the next Big Thing for the Australian economy. As well as being Shadow Finance Minister, Robb is also chairman of the Coalition policy development committee. The successful resources sector is now vulnerable to decline, and food needs to take up the slack. Is Robb a strategic visionary or cargo cultist?


The push emanates from a loose coalition, some of whose members align over a potential economic dreamtime in the deep North – including the resources-funded Institute of Public Affairs, the Reinhart/Kins ANDEV (Australians for Northern Development and Economic Vision) and successive Northern Territory Chief Ministers.

But, ah, this tropical gold rush is going to be had by the creation of a Special Economic Zone. And the SEZ will be built on 457 visa indentured ring-ins. So where's the trickle down to come from?

Ah, the boom is also going to sweep up the unemployed from indigenous communities. Well why hasn't this happened already, given the prescience of the free market and the support of its most ardent advocates? Rather, success depends upon special contributions and concessions from overbearing Canberra – in the IPA's John Roskam's words, "freer regulation and greater public investment"! ('Southern red tape hobbles Top End's great leap forward', 6 April 2013)

A complementary dimension involves hitching Australia to hungry Asia. Then trade Minister Craig Emerson (another News Limited favourite) said in February, "Australia has an abundance of arable land." ('Our role as feeder nation offers food for thought', 23 February 2013) Well, not quite, and what Australia has is generally being exploited intensively.

Someone should alert Emerson about NSW, where this abundant arable land is being supplanted by miners pursuing cheap coal in a declining market, now joined by ravenous coal seam gas explorers. Successive NSW governments have obliged by dismantling the primary industry bureaucracy under super Departments with a de facto mining priority.

Roskam also claims that the Northern Territory "has a moral obligation to help feed Asia's millions". Yet India has been undermining peasant agriculture for decades, and China is now engaged in a madcap thrust for urbanisation, based on a speculative building frenzy. Australian governments and producers have no 'moral obligation' to offset the distorted priorities of other countries through trade strategy, though this arena may be a matter for diplomacy.


Then there's the financing problem. Australia's $1.6 trillion superannuation goliath is ill-disposed, although there is some industry funds investment via hands-on funds managers. The sector is not unproblematic. Returns are cyclical and, for producers, low on average; there are dodgy corporate players; ownership structures are highly fragmented. Add the more than occasional flood and drought. Agriculture is a long-term proposition or nothing.

However the envisaged White Knight is Chinese capital. Let 'er rip, thinks this coalition. China is pushing for any project up to $1 billion to be automatically processed without Foreign Investment Review Board scrutiny (already embarrassingly lax). Anybody querying the enthusiasm is tarred with the hackneyed 'xenophobia' brush.

The coalition, now including the current Trade Minister Richard Marles, also want an overnight unrestricted Free Trade Agreement with China, eyeing the New Zealand precedent.

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About the Author

Dr Evan Jones is an Honorary Associate Professor in Political Economy at the University of Sydney, where he has taught since 1973. His research interests are in Australian economic history and the political economy of comparative industry and economic policy structures in capitalist economies.

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