FINDING THE ROAD FORWARD

OPPORTUNITIES TO INCREASE WA AGRIFOODS EXPORTS

INTERIM DRAFT Discussion document subject to revision; not for reference
March 2015; v0.95a
DOCUMENT OBJECTIVE/PURPOSE
This document seeks to bring new perspectives to the challenge of increasing Western Australias agrifood
exports

Coriolis is a management consulting and market research firm that As outlined in this document, we believe Western Australia has
focuses on agriculture, FMCG (fast moving consumer goods) and anywhere from $4b to $40b in incremental agrifood value upside.
retailing, servicing clients across the Asia Pacific region. Coriolis
have recently opened an office in Perth, Western Australia as an
We are not alone in believing that Western Australia has huge
endorsement of the regions capability and potential to be an
potential for growth. The Western Australia Government is
agrifood leader in the Asia Century. This document represents our investing $300m of the Royalty for Regions funding into their
first contribution to assisting Western Australia's agrifood
Seizing the Opportunity program. This investment is intended to
potential.
catalyse and encourage growth in the agrifood sector in the State.

Western Australia has huge potential for agrifood growth. The

State is the size of Western Europe with the population of Jamaica.
It is four times the size of Texas, five times the size of the Ukraine
and six times the size of California.
The objective of this document is to assist the growth of the
industry by bringing new perspectives to the challenge of
increasing Western Australias agrifood exports.

For a range of historical reasons, this massive region is not
currently intensively farmed. As one example, Israel with 1% of the
land and 5% of the water produces twice as much food &
beverages as Western Australia.
As well as having spare capacity to produce more, Western
Australia has location. The state is on the doorstep of South-East
Asia (a third of world population) and close to East Asia (one
quarter of world population).
The research takes a big picture point of view of the agrifoods
sector and identifies key drivers for growth. While its an overused
clich, from our research we believe that many in Western
Australia are missing the forest for the trees in terms of the size
and nature of the opportunity. This document looks at the big
picture of the forest and scale of the potential size of the prize.

2
DOCUMENT OBJECTIVE/PURPOSE
As this is an internal pro bono project, scope is kept relatively tight and focused; the objective is to frame
the questions rather than answer them in detail

IN SCOPE OUT OF SCOPE

- Identifying macro drivers for industry value growth
- Focused on growing exports rather than selling more in
the relatively small domestic market
- Comparisons of Western Australia with select, relevant
peer group countries to provide perspective
- Food agriculture and seafood
- Detailed analysis of specific sectors and products
- Excessive discussion of barriers or challenges to
growth
- Proposing detailed solutions, business plans or
business advice
- Policy advice to government
- Fibres (wool, cotton, etc.), forestry, pearls and other
non-food incomes streams

3
DEFINING RELEVANT COMPARISONS
In order to develop a better perspective on the Western Australian situation and opportunity, this report
uses a range of peer group countries for comparisons depending on their relevance to the question

Economic development peers Economic development peers Climatic peers

but not climatic peers and climatic peers but not economic development peers
Relevant to economic comparisons Relevant to economic Only relevant to climatic comparisons
(e.g. value-added to agrifood exports) and climatic comparisons (e.g. water use, irrigation)
Not relevant to climatic comparisons
United Kingdom Israel Mexico Yemen
Canada Spain Turkey Oman
New Zealand Italy Morocco Iran
France Portugal Egypt Mozambique
Germany Chile South Africa Ethiopia
Denmark Parts of the United States Peru Iraq
Switzerland (e.g. Arizona) Kazakstan Sudan
Other Northern Europe Parts of Argentina Kenya Uzbekistan
Tunisia Chad
Lebanon Azerbaijan
Saudi Arabia Turkmenistan
Syria Eretria
Somalia Jordan
Botswana Libya
Algeria

4
OUTLINE

What we want to achieve

How we could achieve it

5
VALUE OF PRODUCTION
Western Australia has grown the value of agrifood production from $1.9b in 1983 to $6.6b in 2013, achieving
a 4.2% compound annual growth rate (CAGR) over the period (non-inflation adjusted)
GROSS VALUE OF AGRI-FOOD1 PRODUCTION IN WESTERN AUSTRALIA: AGRICULTURE AND SEAFOOD
A$m; 82/83-12/13

$7,000
$6,613m
30y CAGR
(83-13)
4.2%
$6,000
3.4 x
Wheat

$5,000

Barley
$4,000
Oats
Other grains

Oilseeds
$3,000 Wheat
Legumes
Hay, etc.
Nursery/other
Vegetables
$1,924m
$2,000 Grapes
Fruit & nuts (x grapes)
Eggs
Milk

$1,000 Meat

Other wild seafood

Rock lobster
$- Aquaculture2
1982-83

1990-91

1992-93

1999-00

2001-02

2003-04

2004-05

2008-09

2009-10

2010-11

2011-12
1989-90

2007-08
2005-06

2006-07
1988-89

1991-92

2002-03
1998-99
1984-85

1994-95
1983-84

2012-13
1987-88
1985-86

1986-87

1993-94

1997-98
1995-96

1996-97

2000-01

1. Focus is food; chart excludes fibre (wool and cotton) and forestry; 2. Food aquaculture, excludes pearls; Source: ABS 7503.0 Value of Agricultural Commodities Produced (various); ABS 7501.0 Value
of Principal Ag Commodities Preliminary (various); ABARE Australian Fisheries Statistics (various years); WA Statistical Yearbook (various years); Coriolis analysis and estimates 6
 INFLATION-ADJUSTED
However, adjusting for inflation reveals an industry struggling to grow in real terms; a handful of sectors
stand out for having created meaningful long-term growth (particularly oilseeds)
VALUE OF AGRI-FOOD PRODUCTION: NOMINAL & REAL 30 YEAR REAL PRODUCTION VALUE GROWTH RATE CAGR
A$m; 82/83-12/13 % of A$; CAGR; inflation-adjusted; 82/83-12/13

$9,000
Oilseeds 23.5%
30y CAGR
(83-13) Grapes 6.1%
$8,000
Real Other grains 5.9%
0.5%
$7,000 Aquaculture, food 5.9%

Nursery/other 3.3%
Real value
$6,000
(Inflation-adjusted) Vegetables 3.0%

Barley 2.6%
$5,000
Fruit & nuts (x grapes) 2.5%

$4,000 Other seafood 2.4%

Nominal Legumes 1.7%
4.2%
$3,000 Eggs 0.4%

Meat 0.1%
Nominal
(As reported on $2,000
the day) Milk 0.0%

Rock lobster -0.5%

$1,000
Hay, etc. -0.8%

$- Wheat -1.0%
1982-83

1990-91

1992-93

2000-01

2004-05

2008-09

2010-11
2006-07
1988-89

2002-03
1998-99
1984-85

1994-95
1986-87

1996-97

Oats -1.5%

Overall
0.5%
Source: page prior sources; ABS 6401.0 Consumer Price Index; Coriolis analysis 7
GROWTH TARGETS
The government has set the goal of doubling agrifood in real terms by 2025; this will require real growth of
5.9%/pa creating $6.6b in new activity; we believe this is possible and propose a stretch target of +$14b
VALUE OF AGRI-FOOD PRODUCTION IN WESTERN AUSTRALIA: HISTORICAL ACTUAL AND THREE MODELS FOR GROWTH
A$b; 82/83-12/13 actual; 12/13-24/25 model

Coriolis Think Big

stretch target
+$14.b @ 10% CAGR
$20

$15

Required real growth

+$6.6b @ 5.9% CAGR

$10

Historical Real value growth

0.5% CAGR
Business-As-Usual
+$0.4b @ 0.5% CAGR

$5

Historical nominal value growth

4.2% CAGR

$-
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89

1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99

2000-01

2003-04
2004-05

2008-09
2009-10

2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18

2021-22

2023-24
2024-25
2007-08
1999-00

2001-02

2005-06
2006-07

2022-23
2010-11
2002-03
1989-90

2019-20
1990-91

2018-19

2020-21
Source: pages prior; DAFWA Agrifood 2025+ material (aims to double the real-term value of sales from WAs agrifood sector between 2013 and 2025; Coriolis analysis 8
GOVERNMENT INVESTING
The State Government recognises the challenges involved in transforming Western Australian agriculture
and is investing almost $300m in the Seizing the Opportunity program, itself building on past investment

The State Government will deliver on key
commitments in agriculture with $297.5m over four
years to help Western Australia's agriculture and
food sector to capture market opportunities in Asia.
This is a landmark initiative that provides $297.5million to ensure our agricultural sector is positioned
to capitalise on the growing global demand for food and agricultural products - much of it right on our
doorstep. The program will focus on short and medium-term strategies to assist WA businesses to
capture the opportunities presented in Asia, the Middle East and other new markets - markets that
need to secure food supplies for their population.
Treasurer Troy Buswell, Aug 2013

This $297.5m from Royalties for Regions for the
Seizing the Opportunity initiative reflects
unprecedented State Government investment in
agriculture
This builds on the State Governments existing
investment in agriculture, including
- $311m Ord Expansion Project
- $30m Australian Export Grains Innovation Centre
- $10m for Muresk
- $178m investment in upgrading road and rail
infrastructure in the Wheatbelt
60 per cent of the worlds population is in the same time zone as WA, which made the State well
placed to capitalise on demand from Asias rapidly expanding middle class. Theres never been greater
opportunity for our agriculture and food sectors to secure new markets and increase productivity and
profitability. This funding will help to promote local products and attract new investment in agriculture,
as well as build business skills, research and development and create efficient supply chains.
Agriculture and Food Minister Ken Baston, Aug 2013
There are huge opportunities for Australian agriculture, and through this unprecedented package we
hope to provide the industry with the skills and resources they need to attract investment and capitalise
on Asias growing demand for food. Just as strategic government investment in the resources sector
has underpinned economic growth in WA, this package aims to drive similar opportunities for
agriculture. This package is an important stimulus for agricultural businesses and will support them as
they present products and opportunities to markets and investors.
Regional Development Minister Brendon Grylls, Aug 2013

Source: Media Statement State Budget 2013-14: Securing our economic future - Seizing opportunities in agriculture Friday, 9 August 2013 9
EXPORT GROWTH REQUIRED
With low domestic food expenditure growth, achieving this target growth will require strong export growth
to fill the gap

Likely real Required real

domestic Western Australian Target
food expenditure food export growth
growth value growth
+ =

1-3% 6-12% 6-10%

2-3% pa Population Discussed page prior

1-3% pa Food $/capita
2-3% pa Food inflation Exports need
to fill the gap

10
PEERS REAL EXPORT GROWTH
Growing agrifood exports at a 6-12% CAGR is not impossible; many climatic and cultural peers have
achieved growth rates in this range over the past decade, through production growth and demand from Asia
10 YEAR REAL GROWTH COMPOUND ANNUAL GROWTH RATE IN TOTAL FOOD & BEVERAGE EXPORTS: WESTERN AUSTRALIA PEERS
CAGR on US$; inflation-adjusted; 2003-2013
11.8%

11.4%

High
10.6%

12%
8.8%

8.6%

8.5%

8.4%

8.2%

7.8%

7.6%

7.2%

7.0%

6.9%

6.5%

6.4%

5.7%

5.6%
Low

5.1%

4.8%
6%

3.5%

3.4%
Kazakhstan

South Africa

Australia

Canada

Greece

Kenya

Italy

United Kingdom

France
Argentina

Morocco
Netherlands
Chile
New Zealand
Turkey

Portugal
Peru

Spain
Israel

Mexico

USA

Source: UN Comtrade database (custom job); US BLS (US$ food price inflation); Coriolis analysis 11
OUTLINE

What we want to achieve

How we could achieve it

12
KEY DRIVERS
Broadly speaking, there are three key drivers available to increase the turnover of the agrifood industry in
Western Australia

Re-evaluate viability of
1. MORE FARM LAND
non-ag crown lands
ha
Bring more private land
into agriculture

Improving yields

KEY DRIVERS TO 2. INTENSIFICATION Changing land use

INCREASE AGRIFOOD
INDUSTRY TURNOVER t/ha Increasing irrigation

Using high intensity

production systems

Improving products
3. ADDING VALUE
Improve positioning
$/t
Transforming product

13
SOURCES OF GROWTH
Our analysis suggests these big picture drivers have the ability to create all the required growth (+$6.6b to
+$14b); our straw man model (developed later) suggests up to $40b is available
ESTIMATED INCREMENTAL VALUE OF DRIVERS/SOURCES OF AGRIFOOD GROWTH AVAILABLE TO WESTERN AUSTRALIA
A$b; model
$46.1
S
CCES
H I G H SU RIO Bullish
USES H SCENA $8.0
LIS Scenario
BUL Total
$0.1 $0.1
Potential
Further upside
$10.0 long-term +$40
+$25.5 incremental
upside
available

$10.0

To stretch
$5.0 +$7.4 target +$14b

$0.3 $1.0
+$6.6
$6.6 $5.0
Required +$6.6b

$6.6 Current

2012-13 More Crown More private Improving Changing land Increasing More high Improving Improving Transforming High Success
Land into land into yields use irrigation intensity existing regional products "Bullish
agriculture agriculture production products positioning Scenario"
systems

1. More farm land 2. Intensification 3. Adding value

Source: Coriolis 14
SOURCES OF GROWTH Likely
PRELIM
subjec INARY
revisio t
Our straw man analysis suggests anywhere from $4b to $40b in potential agrifood n; feed to significan
back w t
elcom
industry growth upside is available to Western Australia e

Incremental Size of the prize beyond business-as-usual

Low success High success

Driver Potential lever under this driver Current situation in Western Australia Bear scenario Bullish scenario

1. More farm land Re-evaluate the viability of non- More than a third of the state is unallocated Not much that is viable; slow Infrastructure and irrigation
ag crown lands government land and ~15% is non-ag/non-park $0 process change the equation
+$500m +$5b

Bring more private lands into An unclear amount of private land not farmed All good land already used New infrastructure enables new
agriculture $0 +$- private land use
+$200-300m

2. Intensification Improving yields Yields typically trail key competitors for a range of Competed away; maintain status- Get to US yields overall
reasons quo 20% increase
+$- +$1b

Changing land use 832,000 sq km farmed at $72/ha Good land already all in crops/ Infrastructure and irrigation
hort; hard to change land use change the equation
+$500m +$5b

Increasing irrigation $800-900m Get to Mozambique Get to Libya or Algeria

(46,252ha x $17-20k/ha) Double area 10x area
+$1b +$10b

Using high intensity production Very limited use of high intensity systems Limited success More like California or Texas
systems Greenhouses $40m; food aquaculture $16m +$1b +$10b
Intensive chicken/pork/beef/lamb ~$250m (TBC ?)

3. Adding value Improving products Opportunities exist to improve the value of existing Achieved slowly but competed Achieve a 5% price premium on
products to the in-market customer or final consumer away to maintain status-quo 50% of agrifood exports
+$- +$120-130m

Improving positioning Opportunities exist to improve the positioning of WA Already built in to buyer pricing; Create a 5% price premium on
agrifood to the in-market customer or the consumer acts to maintain status-quo 50% of agrifood exports
+$- +$120-130m

Transforming products Most exports leave as raw material ingredients not Get to Finland Get to Denmark
consumer/foodservice-ready final products +$1b +$8b

TOTAL Industry $7b / Exports $4.9b Almost double exports 8-10x upside on exports
+$4b +$40b

Source: Coriolis analysis and estimates 15

1. MORE FARM LAND
The first potential driver is to bring new land into agriculture

Re-evaluate viability of
1. MORE FARM LAND
non-ag crown lands
ha
Bring more private land
into agriculture

KEY DRIVERS TO
INCREASE AGRIFOOD
INDUSTRY TURNOVER

16
MORE FARM LAND (+$500m to $5.3b)
The amount of agricultural land in Western Australia has been trending down

TOTAL LAND USED IN WA IN AGRICULTURAL ESTABLISHMENTS AREA UNDER PASTORAL LEASES IN WA

Ha; m; 1900-2014 Ha; m; 1900-2014

120 120

Line of best fit to

limited available data
100 100

80 80

60 60

40 40

20 20
NOTE: Data includes land not
under agricultural use (e.g.
reserve); not directly
comparable with chart left
0 -
1900
1904
1908

1932

1940

1952

1972

1980

2000
2004

1900
1904
1908

1932

1940

1952

1972

1980

2000
2004
1960

1960
1944

1944
1916

2008

1916

2008
1948

1984

1948

1984
1920

1964

1920

1964
1912

1912
1988

1988
1968

1968
1996

1996
1924

2012

1924

2012
1928

1928
1992

1992
1956

1976

1956

1976
1936

1936
Source: various historical statistical publications and yearbooks; ABS; other; Coriolis analysis and estimates 17
MORE FARM LAND (+$500m to $5.3b)
Only a third of Western Australia is farmed and 93% of all land is owned by the government; any significant
increase in farmland would need to come from re-evaluating the crown estate
WA LAND USE IN FARMING AND SELECT OTHER USES WA LAND OWNERSHIP
Sq km; 000; 2013 Sq km; 000; 2010

European settlers didnt want

this land 100 years ago. Does
new technology make any of
this viable? (e.g. irrigation)

Horticulture
0.3 0%
Unallocated
961
38% Arable
84
3%

Government Private
Total land owned Total land 177
2,530 2,353 2,530 7%
Grazing 93%
Parks, etc.
748
261
30%
10%

Non-ag
475
19%
Agricultural
land
33%

Source: Agricultural Commodities Australia 2012-13 (ABS; 7121.0); DPAW Annual Report 2013/14; EDOWA Fact Sheet 12 Dec 2010; Coriolis analysis 18
2. INTENSIFICATION
The second potential driver is to intensify the use of existing land to increase its output

Re-evaluate viability of
1. MORE FARM LAND
non-ag crown lands
ha
Bring more private land
into agriculture

Improving yields

KEY DRIVERS TO 2. INTENSIFICATION Changing land use

INCREASE AGRIFOOD
INDUSTRY TURNOVER t/ha Increasing irrigation

Using high intensity

production systems

19
LOW EXPORTS PER SQUARE KM
Western Australia is not intensively farmed; the broad strategic direction for the state is to increase food &
beverage exports per square kilometre
FOOD & BEVERAGE EXPORTS PER SQUARE KILOMETRE: WESTERN AUSTRALIA VS. SELECT PEERS
US$; 2013; A$; 2012
$140,333

$125,878

$120,206

$105,060

$93,686

$85,944

$71,927

$44,925

$20,305
$21,489

$14,808
$14,875

$12,006

$9,321

$4,604
$7,531

$5,398

$4,755

$3,956

$1,937

$943
Israel

Spain

New Zealand

Portugal

Chile

Turkey

Argentina

Mexico

Morocco

Peru

Egypt

Western Australia
United States

Kazakhstan
Italy

France

Greece
United Kingdom

South Africa

Kenya
Canada
Source: UN Comtrade database (custom job); DAFWA WAAFFF 2013; Coriolis analysis 20
IMPROVING YIELDS ($0 to $1b)
Western Australian yields typically trail those in other regions, with the state constantly playing catch-up,
as this example from barley shows
EXAMPLE: WA BARLEY YIELD YIELD AS A % OF USA YIELD
T/ha; 1961-2012 % of US yield; 1961-2012

180%
2.5 51 year
Absolute
160% Change
vs. US

2.0 140% Chile +43%

120%

1.5 Canada +40%

100%
S. Africa +58%

80%
1.0
60%
WA -3%

40%
0.5

20%

- 0%
1973
1977

2001
2005
2009
1989
1969

1981
1961

1985

1964

1970

1988

1994

2003
2006
2009
1965

1997

1961

1991

2012
1993

1982
1985
1967

1976
1979

1997
2000
1973

Source: UN FAO AgStat database; ABS (various reports); Coriolis analysis 21

IMPROVING YIELDS ($0 to $1b)
Almost across the board, Western Australia achieves low yields relative to a wide range of climatic peers

EXAMPLE: WA POTATO YIELD VS. SELECT PEERS EXAMPLE: WA WHEAT YIELD VS. SELECT PEERS
T/ha; 2012 T/ha; 2012

6.6

35
5.7
30 29
28 28 4.9
27 27 26 26
24 4.1
3.7
19

2.8 2.8 2.7 2.6

14

1.5 1.4
1.2
South Africa

Morocco

Egypt

Chile

Italy

Greece

Egypt

Chile

Italy

South Africa

Greece

Morocco
Turkey

Turkey
Peru
Spain

Peru
Spain
Israel

Israel
Mexico

Mexico
WA

WA
Source: UN FAO AgStat database; ABS (various reports); Coriolis analysis 22
 CHANGING LAND USE ($500m to $5b)
The vast majority of Western Australian agricultural land currently generates very low value per hectare;
only 0.1% of land generates over $1,000 per hectare
LAND- BASED AGRICULTURE IN WA: AREA USED VS. VALUE PER HECTARE
Ha; $/ha; 2012/13
ZOOM &
STRETCH
$34,108 0.1% of land
$28,143

Value per hectare

$8,857

$/ha; 2012/13
$8,038

$3,698
Vegetables
Fruit
Hay & silage
Grapes

Milk

Area filled in = distribution of $6.1b total gross value of agriculture (excludes value-added beyond farm)
$606

$441
$510

$339

$14 Average
= $72
Oilseeds
Other grains

Wheat

Pulses

Livestock

Area used
ha; 2012/13

Source: ABS (various data sets); Coriolis analysis 23

CHANGING LAND USE ($500m to $5b)
Israel demonstrates what is possible, generating twice the value of Western Australia on 1% of the land and
5% of the water
TOTAL REGIONAL AREA RENEWABLE WATER TOTAL F&B VALUE/AG HA TOTAL F&B INDUSTRY VALUE
Sq km; 2014 Cu km; 2013 $/ha; 2013 A$/US$; billions; 2013

37.7
$34,824 $15.5
2,529,875

More More
than than
400x twice
value the
per ha size

$7

Less
Less
than 5%
than 1%
of the
of the
water
land

1.8
20,770 $84 *

WA Israel WA Israel WA Israel WA Israel

* Includes value added to agricultural products (unlike $72 page prior)

Source: CIA World Fact Book; ABS (various data sets); DAFWA; National Water Commission Australian Water Resource 2005; Coriolis analysis 24
CHANGING LAND USE MORE HORTICULTURE
Peer group suggest using more land in high-value horticulture is possible

AREA IN FRUIT & VEGETABLES: WESTERN AUSTRALIA VS. SELECT PEERS PERCENT OF TOTAL COUNTRY/REGION AREA
Hectare; 2012 % of ha; 2013

Turkey 2,214,364 2.8%

Iran 1,901,239 1.2%
Spain 1,858,071 3.7%
Italy 1,575,779 5.2%
France 1,125,365 1.8%
Argentina 673,930 0.2%
Morocco 550,060 1.2%
Iraq 539,620 1.2%
South Africa 456,738 0.4%
Chile 448,574 0.6%
Portugal 443,527 4.8%
Tunisia 373,694 2.3%
Saudi Arabia 354,700 0.2%
Greece 346,295 2.6%
Kenya 343,670 0.6%
Israel 128,176 5.8%
Zambia 79,160 0.1%
Zimbabwe 68,016 0.2%
Western Australia 29,470 0.01%

Source: Agricultural Commodities, Australia, 2012-2013 (ABS; 7121.0); United Nations FAO AgStat; Coriolis analysis 25
INCREASING IRRIGATION ($1b to $10b)
While Australia may be the driest continent, Western Australia has a reasonable amount of water relative
to climatic peers
TOTAL RENEWABLE WATER RESOURCE: WESTERN AUSTRALIA VS. CLIMATIC PEERS
Cubic kilometres; 2011

WA DATA
PRELIMINARY
217 Need to review with
212
Department of Water
191

137
122
112

90

69 65
57
49
43
38 35
29 25
20 18 17 15 12 12
6 5 5 2 2 2 1 1 1
Mozambique

Turkey

Spain

Portugal

Egypt

Uzbekistan

Western Australia

Azerbaijan

Morocco

Namibia

Syria

Somalia

Botswana

Lebanon

Saudi Arabia

Yemen

Israel

Oman
Tunisia
Iraq
Iran

Turkmenistan

Zimbabwe
Italy

Algeria

Libya
Jordan
Ethiopia

Chad
Sudan

Eritrea
Source: CIA World Fact Book; National Water Commission Australian Water Resource 2005; Coriolis analysis 26
INCREASING IRRIGATION ($1b to $10b)
Relative to a wide-ranging peer group, Western Australia uses a small percent (3%) of its total renewable
water resource
FRESHWATER WITHDRAWAL AS A PERCENT OF TOTAL RENEWABLE WATER RESOURCE: WESTERN AUSTRALIA VS. CLIMATIC PEERS
% of cu km; 2011

WA DATA
Mining fossil PRELIMINARY
986%

water and using

desalination to Need to review with
exceed 100% Department of Water
619%

170%

119%

115%

100%
100%
113%

110%

94%

74%

73%

68%

62%

49%

43%

43%

35%

29%

29%

24%

22%

21%

19%

18%

16%

12%

9%

0%
5%

5%

3%

3%

2%

2%
Morocco

Azerbaijan

Spain

Lebanon

Somalia

Turkey

Mexico

Portugal

Western Australia

Chile

Namibia

Botswana

Mozambique
Saudi Arabia

Yemen

Egypt

Uzbekistan

Israel

Syria

Oman

Pakistan
Turklenistan

Tunisia

United States
Iraq

Iran

Zimbabwe
Algeria

Italy
Libya

Jordan

Ethiopia
Madagascar
Sudan

Eritrea
Source: CIA World Fact Book; National Water Commission Australian Water Resource 2005; National Water Account Australia (ABS 4610.0); Coriolis analysis 27
INCREASING IRRIGATION ($1b to $10b)
The amount of land irrigated in Western Australia has been growing long term

Data is
AREA OF AGRICULTURAL LAND IRRIGATED IN WESTERN AUSTRALIA s
Treat a ues exist
Ha; 1900-2012 s direct
ional

60,000

5 period
50,000 moving
average

40,000

30,000

20,000

10,000

-
1900 1920 1940 1960 1980 2000 2020

Source: various ABS publications released over the past 100 years; Coriolis analysis 28
INCREASING IRRIGATION ($1b to $10b)
Currently the North and South of the state have about the same amount of irrigated area; long term growth
in irrigated area has been stronger in the North of the state
IRRIGATION AREA BY REGION: CURRENT & IN-CONSTRUCTION IRRIGATION AREA BY SUPER-REGION
Hectare; 2015 Ha; 1955/1974-75/2015

64,526

S/SW
North
34,482
30,044
53% Perth Metro 47%
24,400
5,620 East Kimberley
9%
Peel
10,426 E. Kimberley
16% 24,400 1,714 West Kimberley
38% 3,930 Other North
TOTAL
64,526
(including in-construction) 28,100
12,759 Other S/SW
South West 5,198
11,297 809 600
17%
Pilbara 6,489
15,051
2,330 300
Wheatbelt 4% 4,898
W. Kimberley 21,723 Peel/South-West
3,206
5% 1,714 15,004
3% 9,853
Gascoyne
Great Southern
Mid West 1,600
3,212
721 2%
5% 1955 1974-75 2015
1%

Note: Other North 1955 (300) and 1974 (600) currently Coriolis estimate; Source: Water For Food brochure (p3); Planning to develop sustainable irrigated agriculture in Northern Western Australia (George,
et al; 2004); State Water Strategy - Irrigation in Western Australia; ABS Gross Value of Irrigated Agricultural Production (various); various historical ABS publications; Coriolis analysis and estimates 29
 30

14 Botswana
76 Namibia
216 Eritrea
508 Western Australia
Western Australia does not have a lot of irrigated land relative to a wide range of climatic peers

589 Oman
789 Jordan
1,181 Mozambique
1,735 Zimbabwe
2,000 Somalia
2,250 Israel
2,896 Ethiopia
Source: Water Use on Australian Farms (ABS 4618.0); WA Irrigation Review Final Report July 2005 (p30); CIA World Fact Book; UN FAO; Coriolis analysis
3,970 Tunisia
4,700 Libya
5,694 Algeria
5,837 Portugal
6,801 Yemen
AREA IRRIGATED: WESTERN AUSTRALIA VS. SELECT CLIMATIC PEERS

10,860 Madagascar
11,990 Chile
14,250 Azerbaijan
14,850 Morocco
16,200 Saudi Arabia
INCREASING IRRIGATION ($1b to $10b)

18,900 Sudan
19,910 Turklenistan
34,700 Spain
35,250 Iraq
39,510 Italy
41,980 Uzbekistan
53,400 Turkey
Sq km; 2013 or as available 64,600 Mexico
87,000 Iran
199,900 Pakistan
266,440 United States
 31

0.003% Botswana
0.01% Namibia
0.02% Western Australia
0.2% Mozambique
0.2% Oman
0.2% Eritrea
0.2% Algeria
0.3% Libya
Relative to climatic peers, a very, very small percent of Western Australia is irrigated

0.3% Ethiopia
0.3% Somalia
PERCENT OF TOTAL LAND AREA IRRIGATED: WESTERN AUSTRALIA VS. SELECT CLIMATIC PEERS

0.3% Australia
0.4% Zimbabwe
0.5% Eastern Australia
0.8% Saudi Arabia
0.9% Jordan
1.0% Sudan
1.3% Yemen
1.6% Chile

Source: WA Irrigation Review Final Report July 2005 (p30); CIA World Fact Book; UN FAO; Coriolis analysis
1.9% Madagascar
2.6% Tunisia
2.9% United States
3.3% Mexico
INCREASING IRRIGATION ($1b to $10b)

3.3% Morocco
4.2% Turklenistan
5.7% Iran
6.4% Portugal
6.9% Turkey
7.0% Spain
8.1% Iraq
Sq km; 2013 or as available
9.9% Uzbekistan
11.1% Israel
13.4% Italy
17.2% Azerbaijan
25.9% Pakistan
HIGH INTENSITY PRODUCTION SYSTEMS ($1b to $10b)
To date Western Australia has made limited moves into intensive production systems

Greenhouses Lot Feeding

Barn Feeding Aquaculture

32
 5 Mongolia
33

8 Iceland
15 Mauritius
15 Jamaica
44 Western Australia
60 Saudi Arabia
60 Tajikistan
60 Bahrain
75 South Africa
80 Czech Rep.
NOTE: Data is from a wide range of sources and may not be perfectly comparable; many countries include glasshouse, greenhouse/PE tunnel & low tunnel; range of estimates for China (up to 2,760,000ha)

80 Yemen
89 Estonia
Peers suggest there are opportunities to increase the amount of crop produced in greenhouses

92 Qatar
100 Guatemala
Source: Cuesta Roble Consulting; Greenhouse production systems in Mediterranean area Leonardi/De Pascale May 2010; Greenhouse Technology Globally: The future of food; Coriolis analysis

109 Latvia
115 Denmark
125 Norway
140 Armenia
140 Slovenia
140 Slovakia
145 Sweden
150 Ireland
152 Malta
166 Macedonia
200 Georgia
200 Uzbekistan
200 Costa Rica
203 Belarus
209 Switzerland
243 Finland
260 Croatia
303 North Korea
350 Azerbaijan
418 Austria
544 Moldova
AREA IN GREENHOUSE/UNDER COVER: WESTERN AUSTRALIA VS. SELECT PEERS

688 New Zealand

720 India
HIGH INTENSITY PRODUCTION SYSTEMS GREENHOUSES

733 Cyprus
760 UAE
800 Iraq
828 Kazakhstan
850 Dominican Rep.
1,000 Serbia
1,075 Bulgaria
1,200 Columbia
1,341 Australia
1,574 Kuwait
1,600 Belgium
2,100 Chile
2,200 Argentina
2,286 Canada
2,600 Russia
2,700 Portugal
2,700 Ecuador
2,700 Ukraine
2,790 Romania
3,100 Syria
3,278 Palestine
3,739 Jordan
4,000 Lebanon
4,000 Iran
4,670 Germany
5,000 Libya
5,400 Hungary
6,200 Algeria
7,560 Poland
8,895 Tunisia
10,000 Brazil
11,759 Mexico
Hectare; 2014 or as available

14,981 Greece
15,000 United States
23,770 Morocco
26,000 Israel
26,500 France
31,800 Egypt
49,049 Japan
49,746 Turkey
57,444 South Korea
71,698 Spain
72,800 Italy
81,000 China
89,600 Netherlands
HIGH INTENSITY PRODUCTION SYSTEMS INTENSIVE FEEDING
Peers suggest Western Australia could convert more of its grain into protein

VALUE OF AGRICULTURAL COMMODITIES PRODUCED: THREE LARGE DRY STATES COMPARED ~$18b
A$/US$; b; 2012/13

$13.1

~$12b

$6.9

$3.9
$3.4
$3.0 $2.9
~$1b
$1.7 $1.8 $1.7

$0.35 $0.46
$0.15

Grain, Pigs, Cattle Milk Grain, Pigs, Cattle Milk Grain, Pigs, Cattle Milk
oilseeds & poultry & oilseeds & poultry & oilseeds & poultry &
pulses eggs pulses eggs pulses eggs

Western Australia California Texas

Source: USDA Census of Agriculture 2012 (various tables); ABS (7503.0); Coriolis analysis 34
HIGH INTENSITY PRODUCTION SYSTEMS AQUACULTURE
Western Australia currently produces very little aquaculture per kilometre of coastline

AQUACULTURE PRODUCTION PER KILOMETRE OF COASTLINE: WA VS. WIDE RANGE OF PEERS

T/km; 2012

964

222

175
167

137 132
122

72 70
53

30 30
22 21 21 18 15
10 10 7 7 6 6
0.6 0.6 0.4 0.3 0.1 0.1 0.1
Taiwan

Indonesia

Iran

Israel

Spain

Peru

Turkey

Malta

Mexico

Portugal

Kuwait

Western Australia
United Arab Emirates
Italy

Qatar
Jordan

Greece
Malaysia

Singapore

Cuba
Vietnam

Cyprus

Uruguay
Philippines

Lebanon

Argentina
Pakistan
Chile

Saudi Arabia

Papua New Guinea

Source: UN Fishstat database; ABARES Aquaculture production in 2011/12 by state; CIA World Fact Book; Wikipedia; Coriolis analysis 35
3. ADDING VALUE
The third potential driver is to add more value to existing output

Re-evaluate viability of
1. MORE FARM LAND non-ag crown lands

ha Bring more private land

into agriculture

Improving yields

KEY DRIVERS TO 2. INTENSIFICATION Changing land use

INCREASE AGRIFOOD
INDUSTRY TURNOVER t/ha Increasing irrigation

Using high intensity

production systems

Improving products
3. ADDING VALUE
Improve positioning
$/t
Transforming product

36
 IMPROVING PRODUCTS ($0 to $130m)
While there are always opportunities to improve product quality and value, in most cases Western Australia
already achieves a premium, as this example from the global wheat trade shows
EXAMPLE: GLOBAL WHEAT EXPORTS: VOLUME VS. AVERAGE VALUE PER TONNE FOR TOP 11 COUNTRIES & OTHER
Tonnes; US$/tonne; 2013

Area filled in = relative export value

$393

$331

$326

$325

$318

$314

$304
$293
$293
+7% above

$286
Average
= $304

$252

$246

$244
Height:
Average export
value per tonne
$/t; 2013

Western
Australia
All other

Canada

Australia

Germany

USA

France

Argentina
Brazil
India

Other Europe

Russia

Kazakhstan

Ukraine
Width: Total global cross-border tonnes exported
T; 2013
Note: Currently using Australian price as a proxy for WA price; need to locate WA source
Source: UN Comtrade database; Coriolis analysis and classifications 37
IMPROVING PRODUCTS ($0 to $130m)
In some cases, Western Australia quality may actually be pricing itself out of the market, as this example
from the global avocado trade shows
EXAMPLE: GLOBAL AVOCADO EXPORTS: VOLUME VS. AVERAGE EXPORT VALUE PER KG
Tonnes; US$/kg; FOB; 2012

$3.43
$3.36
$2.78
$2.26
Height:

$1.93
Average
US$/kg
$1.63
$1.58

$1.78
Export
price
$1.14
$1.13
$1.05

CIF
$0.90

(2012)
$0.50

WA

Australia
New Zealand
Dominican Rep.

USA
Spain
Chile
Kenya

Peru
Other C/S America

Mexico
Israel
Other

South Africa

Width: Volume of avocados exported in tonnes (2012)

Source: UN Comtrade database; Coriolis analysis and classifications 38

IMPROVING POSITIONING ($0 to $130m)
There are opportunities to improve the positioning of Western Australian agrifood in export markets

IDENTIFIED TYPES OF COUNTRY, REGIONAL OR INDUSTRY LEVEL POSITIONING USED IN AGRIFOOD

Model; 2015

Ethical claims about Health claims Branding/positioning of the producing

the production system about the product country or region
Example attributes Fair trade Low in fat Clean & green
Organic High in calcium Safe food
Free range Low in salt Provenance
Cage free Heart healthy Tradition & culture
Barn laid Cures urinary tract infections Authentic
Sustainable Anti-bacterial; anti-microbial Majestic & picturesque

Role of government Regulating claims Regulating claims Regional branding

In-market promotion Funding research Regulation/rules

Example certification
systems

Example of global leaders/ Alaska (Seafood) NZ Manuka Honey Anglia

global best practice Iceland (Seafood) AHA Heart Health Switzerland
USA (Organic) Italy (various)
France (various)
Western Australia current - Overall: LIMITED - Overall: NONE (?) - Overall: SOME (primarily domestic)
performance - Some positioning around free range - None WA-unique/specific identified - Buy West Eat Best campaign targeted
- Some seafood sustainable (e.g.rock locally
lobster) and MSC certified - Some regional identity development (e.g.
- Very limited organic Southern Forests, Margret River wine)

Source: Coriolis 39
 TRANSFORMING PRODUCTS ($1b to $8b)
Rich country peer group suggest Western Australia (GDP/capita $102,232) has opportunities to transform
more of its ingredient raw materials into value-added processed foods and beverages
AGRIFOOD EXPORTS VALUE SHARE BY SEGMENT: WESTERN AUSTRALIA VS. OTHER RICH COUNTRIES
% of value; 2012/2013

2% 5% 5% 2% 4% Beverages
9% 8% 6% Processed foods
11% 11% 11% 11% 3%
Beverages 23% 22%
16% Oilseeds/oil & fat
36% 28% 31%
34%
48% 42% 33% 32% 31%
37%
47%
50%

0% 2% 15%
0% 1% 3% 19%
45% 1%
1% 2% 1%
1% 11%
4% 4% 56% Grains
33% 2% 13%
2% 3% 2%
Processed foods 66% 11% 21% 19%
3% 7% 6% 15%
2% 15% 33%
3% 4% 12%
1% 1%
2% 3% 4%
3% 21% 34% 13% 10%
3% 16% 13%
14% 1% 1% Produce
7% 36% 3% 1% Dairy
30% 3% 4% 8% 6%
2% 4% 28% 6% 29% Seafood
7% 4%
0% 8% 5% 3%
9% 1% 15% 4% 15% 12% 12% 14% 13% Meat
10% 6% 8%
0%
1% 2% 5% 2%
United Kingdom

Italy

Japan

Germany

Argentina

Finland

Denmark

Canada
Netherlands

Ireland

Western Australia
Switzerland

Spain
Sweden

USA
Source: UN Comtrade database; DAFF Australian Food Statistics (various years) Table 5.8; Coriolis analysis 40
TRANSFORMING PRODUCTS ($1b to $8b)
Transforming Western Australian ingredient raw materials into finished packaged foods & beverages has
huge potential to add significant value
Western Australia exports $2.8b Scotland exports $6.8b worth of
worth of this this
$37.99

152x

$37.74

$0.25

Export value of grain Value added by Retail price of a

in a bottle of whisky everyone else in the bottle of whisky
value chain and tax

Source: Dan Murphys online; Grants Whisky corporate blog; UN Comtrade; Coriolis analysis 41
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