Sovereign risk growing issue in Australian agribusiness

Sovereign risk is increasing as an issue for growth in agribusiness, Elders Limited Chief Executive Officer and Managing Director, Mark Allison has told a CEDA audience in Brisbane.

“Operating in Indonesia, China, Vietnam…multiple other countries…there’s multiple sovereign risks.

Sometimes we need to look in the mirror,” he said.

“How easy is it to do business here? What chance is there of having your investment approved?"

Also speaking at the event was Wellard Limited, Chief Executive Officer and Managing Director, Mauro Balzarini who discussed the perception of foreign investment in Australian agriculture.

“It’s the not the colour of the money which is important, it’s the quality of the money,” he said.

“What is the business plan for the foreign investor? Are they coming here to invest, create jobs, pay taxes, develop new technologies?

“I don’t think it’s important if…(the) money is coming here from China, UK, United States, as long it comes here to create wealth in Australia and to develop the Australian farming community.

“There is a lot of opportunities and…competitive advantage in the quality of our food, in the quality of our products and the quality of our farms as well because they are probably the best in the world but there are challenges we need to address to keep our competitive advantages, because otherwise if the costs become too high it’s all wasted.

“We still need to be competitive, we still need to have an environment that allows us to export and one of the biggest things we need to understand that the red tape in general in Australia is becoming a big problem not only just for our business but for every business.

“Australia has always been on the top for easiest country to do business (with), unfortunately (we have fallen) quite significantly in the last five years and that needs to be rectified.

“We cannot spend more money on paperwork than on buying an animal for export.

“We have advocated…that we need to simplify the business environment and to make it more efficient.

“Let’s try to produce efficiently so we can ensure that we as an agricultural business can make money and we don’t have to spend all our money on bureaucracy and into inefficiency in the supply chain.”

Mr Balzarini also touched on the importance of infrastructure.

“Road, rail, ports - if today we would like to double our export capacity…where do we export it from?” he said.