Farm boom could take up mining slack: McGauchie
But the Nufarm chairman and Graincorp director fears the opportunity to feed China's booming middle class may already be lost.
Speaking to the American Chamber of Commerce on Wednesday, Mr McGauchie - also a former Telstra chairman - said demand for food in Asia was expected to double by 2050. Investment in the sector was urgently needed to meet this rise in demand.
"Australia is on the doorstep of what promises to be the greatest leap forward, in terms of prosperity, since the Industrial Revolution," he said. "We are at risk of missing that once-in-a-century opportunity due to a chronic lack of skills, people, capital, infrastructure and policies."
Mr McGauchie's comments come at a sensitive time for an industry divided over the impact of foreign investment. This follows US grain giant Archer Daniels Midland's $3 billion takeover of Graincorp, which is facing opposition from some lobby groups in NSW.
Mr McGauchie would not comment on the takeover, but said the sector had long been dominated by foreign buyers.
"I think Australian investors will wake up one day and find that a lot of the opportunities passed them by because they didn't recognise them soon enough," he said.
Economists surveyed by BusinessDay last week said they believed the mining investment boom was at its peak, and that businesses would invest less in the new financial year than they did in 2012-13. This contrasts Treasury forecasts, which imply the peak is still ahead.
Mr McGauchie said the country could more than double the real value of agriculture exports by 2050, taking it from $35 billion to $73 billion with investment in productivity and infrastructure.
Frequently Asked Questions about this Article…
Donald McGauchie — Nufarm chairman, Graincorp director and former Telstra chairman — said Australia could enjoy an agriculture boom that carries the economy forward as the mining boom recedes. He argued that with the right investment in productivity and infrastructure, agriculture could take up mining slack and drive long‑term prosperity.
McGauchie said the real value of Australian agriculture exports could more than double by 2050, rising from about $35 billion today to roughly $73 billion if there is significant investment in productivity and infrastructure.
The article notes that demand for food in Asia is expected to double by 2050. McGauchie warned that without urgent investment in productivity, infrastructure and the right policies — and improvements in skills, people and capital — Australia risks missing that rising demand from Asian markets.
Yes — McGauchie and some economists suggest agriculture could help fill the gap. Economists surveyed by BusinessDay said mining investment may have peaked, which opens an opportunity for other sectors like agriculture to expand if they secure sufficient investment and policy support. (The article also notes Treasury forecasts differ on the timing of the mining peak.)
The article cites the $3 billion takeover of Graincorp by US grain giant Archer Daniels Midland (ADM). It notes the deal has provoked opposition from some lobby groups in NSW and highlights McGauchie’s comment that the sector has long been dominated by foreign buyers.
McGauchie would not comment directly on the ADM takeover of Graincorp, but he did observe that the agricultural sector has historically attracted significant foreign investment.
He warned of a chronic lack of skills, people, capital, infrastructure and supportive policies — all of which, he said, could prevent Australia from seizing a once‑in‑a‑century opportunity in agriculture.
The article’s message for investors is that Australian agriculture may offer significant long‑term opportunity as mining investment cools, but capturing that upside depends on major investment in productivity, infrastructure and workforce skills. McGauchie also cautioned that some Australian investors may miss chances if they don’t recognise them early, especially in a sector with substantial foreign participation.
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