Cattle farming makes up about 44 per cent of the NT’s agribusiness sector. (Landline: Owain Stia-James)
Northern Australia: it’s huge, has plenty of fertile soil, and abundant rainfall. For years, it’s also been touted as the “food bowl of Asia”. But is that realistic?
Questioner Ian asked us: “Why isn’t the tropical north, with its vast expanse of land and plenty of rainfall, producing more agriculturally? It’s a great Aussie resource that seems to be neglected by the major corporations.”
Curious Darwin is our story series where you ask us the questions, vote for your favourite, and we investigate. You can submit your questions on any topic at all, or vote on our next investigation.
We took a look at what more we could do, and where the roadblocks are.
So, can we do more?
Absolutely, the NT Government and industry spokespeople agree.
“There is enormous potential to significantly increase production over the coming decades,” a spokesman for the NT Department of Primary Industry and Resources said in a statement.
“There is huge growth potential for beef production, significant forestry plantations that will be reaching harvest potential in the next decade, and our agricultural industries have the potential to significantly expand and increase in value into the future.”
The Government shied away from putting a number on that future increase.
But it did say that as of 2015/16, the NT’s agribusiness sector was worth $736 million in sales, of which 44 per cent is the cattle industry.
About $245 million, 30 per cent of the sector, is the horticulture sector, including mangoes, melons, vegetables, grapes, nursery and turf, hay, and minor crops.
There’s “no doubt” NT could easily triple its current output if all the impediments were removed, said Luke Bowen from the Northern Australia Development Office.
The NT’s production is worth double the Ord Irrigation Area in northern Western Australia, which produces about $50 million per year, while northern Queensland’s agriculture — a bigger and more developed industry — is worth almost $5 billion per year.
Far North Queensland is the engine room of Australia’s $2 billion sugar industry and its $600 million banana industry, which is why it’s such a powerhouse.
It takes time
Developing the difficult terrain of northern Australia needs time, experts agreed.
The NT’s horticulture industry was worth almost nothing in 1981, and has grown to almost a quarter of a billion dollars over the past 37 years through slow and considered development, says NT Farmers Association CEO Greg Owens.
“When the English first came to Australia they tried to grow things like they did in England and they almost all starved to death,” he said.
“It’s taken 200 years to work out growing systems for southern Australia, and they expect the tropics to do it overnight. It’s not that easy.”
Former mango farmer and agricultural consultant Ian Baker said Top End horticulture is based on farm-gate economics.
“People say, ‘the failure of the past is due to markets’; it’s not, there’s always markets,” he said.
“It’s markets at a price that the farmer can make a profit at.”
Mr Warriner agreed: “In agriculture you have to make money; it’s not a charity. You have to make a profit or you’d go broke.”
Just about anything can be grown in the north, said Mr Owens, but Australia has high labour costs, “so we need to get a good return for our growers rather than just grow bulk food and try to compete in Asia”.
Land tenure ‘a huge problem’, investors scared off
Mr Baker said the biggest issue was a lot of land is tied up on pastoral leases that can’t be subdivided.
David Warriner, CEO of the Livestock Exporters Association NT, agrees.
“Land tenure is a huge problem in that where you have pastoral leases, whether they’re perpetual leases or crown leases, the minute you want to change what you do it triggers native title,” he said.
The legal negotiations could be costly, he said, “and you have to effectively buy back the native title from the traditional owners. Which is fine but it also adds to the cost of doing business.”
Some 55 per cent of the NT is Aboriginal freehold land.
“There’s enormous potential … a lot of Aboriginal land is yet to be developed significantly in any commercial way,” Mr Bowen said.
Tracey Hayes is a member of the Cooperative Research Centre for Developing Northern Australia, and said that the diversification of pastoral leases — allowing the land to be used for other things such as horticulture — has been tied up in red tape by the NT Government, duplicating federal regulation.
“The perverse outcome is that by doing this it actually detracts from jobs and growth in rural and regional areas, which is where Indigenous people are the workforce,” she said.
Bureaucracy has had a destabilising effect on the NT’s industry, Ms Hayes said: “We can be doing so much more, but boy oh boy, they make it hard.
“Capital flows along the path of least resistance, and we’re making it that hard that people are looking to go elsewhere.”
Mr Warriner agreed: “Those that have invested here might have had a bad experience, or we’ve actually frightened investment away,” he said.
Politics plays its part
Northern Australia is only represented by 10 seats in the Federal House of Representatives, of 221 national seats.
“There’s a big problem in that the south-eastern voter has an enormous amount of political clout … to the detriment of what’s happening in the north,” Mr Warriner said.
That affects everything from live exports, tree clearing, funding allocation for infrastructure, roads and tourism, and Aboriginal communities, he said.
There’s also high turnover rates of governments and ministers which makes it hard to retain relationships and to keep work flowing, stakeholders say.
In the past three years the NT alone has had three Primary Industry ministers.
Ms Hayes said one of the biggest issues in the Top End was getting funding for the right critical infrastructure links, such as improving the Darwin Port and key roads.
“Our main focus is access to market and getting produce out year-round, not just being a dry season industry in the north,” she said.
Improving remote roads is key to making cattle a year-round industry in the Top End. (Landline: Owain Stia-James)
Geographic isolation comes at a cost
The most developed agricultural industry in the NT is cattle, which takes up 45 per cent of the land and is worth over $2 billion, making about $600 million in sales every year, Mr Warriner said.
Of the two million head of cattle in the NT, 500,000 are sold each year. The Kimberley has a herd of about 700,000, while Queensland has 10 million.
This could be grown to three million on existing lands, Ms Hayes said.
But Mr Warriner said a major impediment to producing more is geographic isolation.
“If we had five million people in Alice Springs, five million in Darwin and five million in Townsville, it would be a totally different industry,” he said.
Because the NT exports the majority of its product, almost everything has to be shipped 3000 kilometres south or is sent overseas, while everything brought in is manufactured in the south-east of the country and then shipped north.
That puts a $200-$250 per tonne freighting cost on “every single thing we use or consume in our business”, Mr Warriner said.
He said the NT was disadvantaged both in terms of both selling and buying, but that could be gotten around by running large businesses to improve efficiencies, particularly in the cattle and mango industries, the NT’s biggest.
The cost of freighting goods from the NT to other states puts a high price on doing business. (AAP: Dan Peled)
The rains, the rains
Another thing that’s misunderstood is how the NT’s huge rainfall can be harnessed, Mr Owens said.
“We’ve tried many times in the past to do dryland agriculture — growing crops without irrigation — and the rainfall in the north, while there might be heaps of it, is too unreliable in its timing and amount to rely on,” he said.
He said farmers were working out growing systems for the region.
“Soybean, cotton, peanuts, mung beans, chick peas, they’re all tropical or semi-tropical crops that can be grown if we develop those growing systems,” he said.
Having quality soil and knowing how much water is available is fundamental for sustainable agricultural development, the CSIRO said.
It found that in an average year of two million gigalitres in rainfall, 15,000 GL could be used to irrigate almost 1.5 million hectares, which would increase Australia’s total irrigated area by about half.
Mr Bowen said the CSIRO had also identified 17 million hectares of additional arable land across northern Australia.
“The NT would have less than 200,000 hectares of land that’s actually in production or developed to any major extent, so it’s a substantially large area,” he said.
The NT’s rainfall is unpredictable and can’t be wholly relied upon for agriculture. (Supplied: NT Police)
What about the ‘food bowl of Asia’?
Mr Bowen said the term was deceptive.
“Even if we produced to our maximum potential, we’d still only produce a relatively small amount of food by world standards,” he said.
It’s estimated Australia currently feeds about 60 to 80 million people outside of its borders, and even if that were to double, at best we might feed 150 million, Mr Bowen said.
Given that Indonesia alone has a population of 266 million, Australia’s contribution wouldn’t be huge.
Voters in the south can determine what happens in the export industries in the north. (ABC Rural: Matt Brann)
“Saying ‘we’re going to feed everybody in Asia’, clearly that’s not going to happen,” Mr Bowen said.
“We have an opportunity to be a premium producer, producing higher-value products with values attached to them such as cleanliness, space, quality assurance that what you’re eating is what it says it is and that it’s going to be good for you and safe to eat.
“That’s what people in our region are prepared to pay more for.”
If the NT can unravel its red tape and lure investors back in, that may just take off.