Friends, green agendas and green thumbs
A few weeks ago I had the pleasure of listening to Cheryl Kallisch Gordon Head of Strategy Rabobank, Australian/New Zealand explain her understanding on global happenings and their impact on Australian agriculture. For the 2023 year and beyond, expectations for agriculture included:
A margin squeeze
A more risky global playing field
Greater price volatility
The likelihood of trading with friends, rather than in the most efficient supply chains
Higher input prices
The need to be greener.
It was how Cheryl explained these which I found the most helpful. After mapping Australia’s agricultural export trade pre-2020, she then overlayed this map with export destinations aligned geopolitically and then those which may not easily align. To further explain, since 2020 political agendas have shifted globally – some now are using imports as a weapon and others have a higher expectation of sustainability.
Data from the last five years had China and Hong Kong almost reaching the $16 billion dollar export figure. Whilst the next highest trader was Japan almost touching the $6 billion dollar mark.
Given the massive amount of exports no longer able to enter China, Cheryl proposed the need to now trade with friends, those countries whose political agendas align. Of course, this means time needed to form new relationships and potential new protocols (we know how long they take) not to mention additional costs. However, it also means that there is a change in the level of ‘green’ required.
China as a trading partner did not have a prominent green agenda, however when friendly trading partners were mapped, the top countries included Japan, USA, Korea, Indonesia, EU, Vietnam and New Zealand with all but Indonesia and Vietnam having more ambitious climate goals than China and/or with superior rank in global tracking of climate change progress.
If you need further evidence that this green movement is only getting stronger, only last month Australia endorsed the Glasgow Breakthrough Agenda on Agriculture (GBAA) at COP27.
The goal of this UK agenda is to make ‘climate-resilient, sustainable agriculture the most attractive and widely adopted option by farmers everywhere by 2030’. It aims to accelerate clean technology transitions through strengthened international collaboration, co-operation and co-ordination.
“Our farmers are on the front line of climate change,” Minister Bowen said.
“Support for this UK agenda will further build Australia’s international reputation as a nation committed to sustainable agriculture production and investment in climate-resilient agriculture production.”
Minister for Agriculture, Fisheries and Forestry, Murray Watt, said the global trade of food and fibre was increasingly being shaped by sustainable production standards.
The need for growers to adopt ‘green’ strategies and practices to everyday growing will become imperative to ensure the best economic value is achieved in all export markets.
