DuPont Food Security Forum in Australia: Feeding Asia-Pacific

1. A report from the Economist Intelligence Unit
Sponsoredby
Feeding
Asia-Pacific
Australia’s role
in regional
food security

2. © The Economist Intelligence Unit Limited 20141
Feeding Asia-Pacific Australia’s role in regional food security
Contents
About this research 2
Executive summary 3
Australia’s role in Asian food security 5
Australia’s historical record as an agricultural exporter 7
The global economy to 2030 14
Slower economic growth scenario 19
Prospective interventions by Asian governments to address food security 22
Australia’s capacity to supply Asia’s expanding demand for food 27
How can Australia become a more attractive food bowl for Asia? 29
Appendix: model specification 31
References 34
1
2
3
4
5
6

3. © The Economist Intelligence Unit Limited 20142
Feeding Asia-Pacific Australia’s role in regional food security
Aboutthis
research
Feeding Asia-Pacific: Australia’s role in regional food
security is a research paper written by The
Economist Intelligence Unit and sponsored by
DuPont. The findings and views expressed in this
briefing paper do not necessarily reflect the views
of DuPont, which has sponsored this publication in
the interest of promoting informed debate. Lucy
Hurst, associate director of custom research for the
Americas, was the research director for the project.
Joshua Grundleger, analyst, was the project
manager and editor. Leo Abruzzese, global
forecasting director and executive editor for the
Americas, served as senior adviser. Katherine
Stewart, research associate, and Martin Vieiro,
analyst, provided research, editorial and analytical
support. Kym Anderson, of the University of
Adelaide, the Australian National University and
the London-based Centre for Economic Policy
Research (CEPR), served as a contributing author
and agricultural economics and international trade
expert for the project. Anna Strutt provided
modelling support. Mike Kenny was responsible for
layout and design.

4. © The Economist Intelligence Unit Limited 20143
Feeding Asia-Pacific Australia’s role in regional food security
l Many industrialising Asian countries, including
China and India, are experiencing growing
populations and wealthier middle classes. These
trends will continue to create increasing demand
for more, and higher-value, agricultural products
that will need to be sourced via imports.
l Asian countries will have difficulties meeting
this demand with local resources, providing
export opportunities for countries, such as
Australia, with strong agricultural sectors.
l East Asia’s dominance as the target of
Australia’s exports will continue to grow over
the next fifteen years. China is the primary
export market, although the region as a whole
imports more than two-thirds of all Australian
merchandise exports. The share of Australian
food exports to Asia is lower, but already
exceeds 40% of total food exports.
l Australia’spotentialtoserveasafoodbowlforAsia
isdependentonhowhighAsia’seconomicgrowth
rateswillbeandhowthisgrowthwillinfluence
structuralchangesandimportdemandinAsia.
l The demand for Australian agricultural products
will be contingent on the policies that Asian
countries pursue to maintain their food security
and food self-sufficiency. Currently, trade
restrictions are the preferred path, but
improving agricultural productivity and research
and development (R&D) should be considered.
l There are considerable opportunities for
Australia to serve as a primary exporter of
natural resources and agricultural products to
these Asian countries. The agricultural sector’s
success is subject to a number of factors,
including volatility in weather, the strength of
the Australian dollar, the importance of mineral
and energy exports, and the growth of key
industries, such as shale and biofuels.
l Australian mining exports have historically
influenced the value of the Australian dollar and
consequently the competitive success, and the
volume, of Australian agricultural exports. The
demand for Australian mineral exports will
continue to play an important role for the
agricultural sector.
l Domestic policies in Australia will also
determine the role that the country can play in
furthering Asian food security. Trade policy,
foreign investment policy, infrastructure
investment, and agricultural R&D investment
and productivity are areas that may have an
impact on Australia’s agricultural exports.
l Definitions of food security and food self-
sufficiency as used in this paper. Food security is a
Executive
summary

5. © The Economist Intelligence Unit Limited 20144
Feeding Asia-Pacific Australia’s role in regional food security
consumption issue that explores the availability,
affordability and utilisation of food by
households. This differs from food self-sufficiency,
which only considers a country’s ability to feed its
population from domestic resources.
l This paper relied upon a Global Trade Analysis
Project (GTAP) model to forecast the potential
Asian demand for Australian agricultural
products in 2030, by modelling the implications
of selected policy scenarios in Asia.

6. © The Economist Intelligence Unit Limited 201436
Feeding Asia-Pacific Australia’s role in regional food security
Whilst every effort has been taken to verify the accuracy of this
information, neither The Economist Intelligence Unit Ltd. nor the
sponsor of this report can accept any responsibility or liability
for reliance by any person on this white paper or any of the
information, opinions or conclusions set out in the white paper.
Cover:Shutterstock

7. London
20 Cabot Square
London
E14 4QW
United Kingdom
Tel: (44.20) 7576 8000
Fax: (44.20) 7576 8476
E-mail: london@eiu.com
NewYork
750 Third Avenue
5th Floor
New York, NY 10017
United States
Tel: (1.212) 554 0600
Fax: (1.212) 586 0248
E-mail: newyork@eiu.com
HongKong
6001, Central Plaza
18 Harbour Road
Wanchai
Hong Kong
Tel: (852) 2585 3888
Fax: (852) 2802 7638
E-mail: hongkong@eiu.com
Geneva
Boulevard des
Tranchées 16
1206 Geneva
Switzerland
Tel: (41) 22 566 2470
Fax: (41) 22 346 93 47
E-mail: geneva@eiu.com