Rapeseed prices in 2050 are significantly higher than 2007 (in 2007 US dollars) reflecting the continued projected strength of demand for rapeseed for both food and feed use.
The report adds that to ensure food goes where it is needed, the policy agenda must include the limitation and removal of trade restrictions, as well as the utilisation of resources by the most efficient regions and sectors.
Projected increases in Australian agricultural production and exports reflect the commodities where Australia has a comparative advantage.
Australia needs to remain competitive to meet the opportunities provided by higher global agrifood demand.
Land and water constraints are inherent in Australian agriculture. If Australia is to remain responsive to changes in world agrifood markets and provide those foods most in demand in expanding markets, it will have to maintain productivity growth through ongoing investment in research and development, the report says.
Sensitivity analysis around some of the underlying assumptions, including land productivity, total factor productivity (TFP) and land availability, was undertaken to examine the robustness of the model and to gauge the response of global food price movements to the supply constraints. This analysis illustrated the significant impact of an increase in TFP growth in increasing food production and reducing upward pressure on global food prices. This result highlights the importance of improvements in productivity to meet the global food security challenge toward 2050.
The report says that Australia is well located to take advantage of the opportunities that higher food consumption will provide but there will be a need for a change to agricultural production in Australia to fully capture these opportunities.
This will only be accomplished with a reversal of the recent slowing rate of growth in productivity and more targeting of consumer needs in the growth areas of the world-particularly Asia.
At the industry level, this will require greater targeting of our products to more diversified markets and targeting different qualities of our products to market segments where there is greatest potential for value adding.
Higher prices can lead to higher productivity by improving incentives for investment in research and development, through innovation and through adaptation of existing overseas technologies applied to an Australian environment.
The government can also assist through a strong commitment to furthering global trade liberalisation and increasing access to a diverse range of overseas markets.
Governments will need to continue to provide a sound economic environment, with appropriate fiscal policy settings that encourage economic and productivity growth -goals achievable only if regulation is limited to those areas where market failures exist and where the benefits of regulation clearly outweigh its costs.
