The agriculture sector is a ‘green shoot’ in the WA economy, but needs government support and foreign direct investment to maximise its potential, says CCI Chief Economist Rick Newnham.
His comment comes as CCI released its Future of Agriculture vision paper this week.
“The future is very bright for agriculture in WA. The opportunities that come from the growth of the middle class in China and other parts of our region mean WA is very well positioned to expand,” he says.
“With the right policy settings, support from government and the right amount of investment it’s going to be a new era for agriculture.”
Newnham says one of the key findings of the paper was that the industry, which accounts for about 10 per cent of businesses in WA and generated about $5 billion in 2014-15, needs investment to realise its potential.
“In the near future between $360b to $850b worth of investment is required in agriculture to take advantage of the opportunities in export growth markets,” he says.
“Foreign direct investment will absolutely be a key part of driving growth in the industry. Without FDI it will be very hard to meet those targets of required investment.”
Newnham says dispelling public misconceptions about foreign direct investment could be accomplished by establishing a register of foreign investors, not only in WA, but Australia-wide.
“This will bring a lot of transparency in this space, very clearly showing where FDI is placed, who the parties are and how much is invested,” he says.
“Once a register is in place I believe a lot of the concerns parts of the community have will be alleviated.”
The vision paper recommends the State and Federal Governments collaborate to provide a fast and adaptive telecommunications infrastructure in regional WA to maximise opportunities.
“We’re seeing the internet of things and automation play a really big role in this space. If we want to take advantage of the role that technology can provide in the growth of agriculture we need to have the communications infrastructure to go with it,” Newnham says.
The paper also flags inconsistent government regulations as impediments to progress.
“Red tape creates a significant issue for agriculture, particularly in the agri-tourism space where both tourism and agriculture industries overlap. This may be visitors to farms or wineries where effectively the business has to comply with two quite onerous sets of regulations,” he says.
“If we can find some ways to streamline that regulation and make it easier for these businesses to get customers in to grow their business and build the confidence they need to reinvest and hire more employees, it can go a long way to building up agriculture in WA.”
He says with agri-tourism being a growth industry with a comparative advantage for WA, the government should do everything possible to enable the growth.
“It is the combination of WA being a great place to live and visit, combined with our rich natural resources in agriculture. Putting those two things together has a great impact on the economy.