South Australia must invest more in agribusiness to reap the benefits of growing Asian demand

South Australia’s agricultural sector risks missing out on the dining boom agribusiness opportunities in Asia unless it can invest more in agriculture and add value to its exports, a CEDA forum in Adelaide has heard.

Food industry leaders told the forum it was not enough to be a clean, green commodity producer and that Australian agribusinesses are falling behind competitors due to a lack of investment in the sector.

Food SA Chief Executive Officer, Catherine Barnett said while best practice German food manufacturing companies spent eight per cent of their turnover on research and development (R&D); six per cent on staff development and six per cent on plant upgrade, Australian companies spent less than one per cent on R&D, three per cent on staff development and 3.5 per cent on plant upgrade.

"If they are (the) three key drivers for business and for growth we are way under par as a country," she said.

While South Australian food, beverage and wine businesses were punching above their weight, representing a cumulative 11 per cent of the national food manufacturing sector, 16 per cent of the national export revenue and 11 per cent of national employment, the sector faced a range of barriers.

"We need to acknowledge that we are a small global player, which reinforces the need for collaboration by industry and government," she said.

"Our economies of scale will dictate the need for collaboration to play on global food manufacturing stage."

The forum heard that labour shortages, government regulation, poor productivity, a high dollar, an ageing farm workforce and lack of access to finance are holding back the agribusiness sector.

Chief Executive Officer of SA-based Thomas Foods International, Darren Thomas, said while New Zealand ranked eighth in the world for labour market efficiency in a recent World Economic Forum survey, Australia ranked 54 and while New Zealand's regulatory efficiency ranked 13 out of 148 countries, Australia's ranked 128.

Australia and South Australia in particular need to have a plan to overcome the shortage of skilled agricultural workers, find new forms of financing and be open to importing manufacturing workers to create more jobs in the longer term.

"The reality is that it is a very high cost place to do business… we do need to look at that productivity equation and get it back into balance and if we don't other countries are just going to pass us by," he said.

In the meantime, companies should look at ways of exploiting their competitive advantage.

This means looking at what customers want, investing in training packages and competing in high value added products.

"We need to focus on products where we can add the most value," he said.