Australia’s drought-prone climate and a lack of investment in agricultural innovation, a lack of grants, and government-blocked foreign investment have left the country unable to realize its potential of supplying the growing middle class in Asia. The idea of transforming Australia’s Northern Territory into a “food bowl” for Asia has been around since the 1950’s but innovation is needed throughout the entire supply chain from products, to packaging, logistics, and distribution to produce the value-added produce required. China currently accounts for 4% of global middle class spending but the Brookings Institution estimates it will overtake the U.S. by 2020 and will account for approximately half of the global increase in food demand by 2050 according to ABARES. Australian agricultural accounts for 2.4% of the country’s gross domestic product at A$50 billion and exports have been increasing, however the industry is made of small to medium sized businesses without cohesion. Australian and New Zealand Banking Group Ltd estimates that A$600 billion in additional capital will be needed between today and 2050 to generate the growth and profitability needed by Australian agriculture.
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