Chief economist update: Malcolm puts agricuture in the middle

Being both a financial adviser and a beef cattle producer I see things on both sides of the fence (pardon the pun). The reality is that ever since governments became addicted to the royalties and taxes from the resources sector they have dropped the ball on agriculture. The city/country divide prevented many voters and politicians from understanding agriculture. The Netherlands is a small, densely populated country, with more than 1,300 inhabitants per square mile. It's bereft of almost every resource long thought to be necessary for large-scale agriculture. Yet it's the globe's number two exporter of food as measured by value, second only to the United States, which has 270 times its landmass. Australia has 179 times the land mass.

Simply, the Dutch government twenty years ago made a conscious decision to prioritize agriculture and made a national commitment to sustainable agriculture under the rallying cry "Twice as much food using half as many resources." We need to ask ourselves how and why we dropped so far down the pecking order in agriculture with all the advantages that we had.

Years gone past I talked to various fund managers and superannuation fund executives about the opportunities in Australian agriculture, whilst their eyes were glazing over, European and North American Pension Funds were investing in our agriculture. In short, they understood Australian agriculture better than Australians did.