VALUE ADDING TO AGRICULTURE - IN CENTRAL WEST NSW - Regional Development ...
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VALUE ADDING
TO AGRICULTURE
IN CENTRAL WEST NSW
A NSW Government Initiative
// This report has been prepared by:
Regional Development Australia Central West
Suite 4, 59 Hill Street
(PO Box 172)
ORANGE NSW 2800
// With funding from:
// Date published:
September 2016
// Author:
Julia Andrews, Project Officer, RDA Central West
// Additional analysis provided by:
A.P. Sheere Consulting
// About Regional Development Australia Central West
Regional Development Australia — Central West is part
of a national network of 55 locally managed, not-for-
profit incorporated associations and is jointly funded
by the Australian and NSW Governments. Our region
extends from Lithgow in the east to Lake Cargelligo in
the west and comprises the local government areas of
Lithgow, Oberon, Bathurst, Blayney, Orange, Cabonne,
Cowra, Parkes, Forbes, Weddin and Lachlan.
// Contributing agencies and sponsors:
A NSW Government Initiative
A.P. Sheere Consulting
Newcrest Mining’s Cadia Valley Operations
contributed to this project as part of its
Community Partnerships Program.
// Disclaimer
This report was produced by RDA Central West
and does not necessarily represent the views of
the Australian or NSW Governments, their officers,
employees or agents.
// Front cover:
Ed Fagan, Cowra
Photo by Kate Barclay
// Publication design: Sauce Design
Contents
Introduction 5
Scope and Purpose 6
Methodology 6
Key Observation Highlights 7
Part 1 8
Value Adding 9
Biotechnology 11
Functional Foods 11
Protein and Animal Feed 15
Bioenergy 18
Digital Technology 20
The Digital Divide 20
Digital Platforms connecting agribusiness to capital 20
E-Commerce 22
Traceability 23
Processing and Packaging 24
The strength of Central West NSW fruit and vegetable processing 25
The decline of Central West NSW meat processing 27
Branding 29
Regional Branding 29
Industry or Sector Branding 29
A Central West NSW Brand 30
“Clean & Green” 31
The Organic Difference 32
Collaboration and Co-operation 34
Collaboration 34
Co-Operatives 37
Export Opportunities and Trade Agreements 40
Part 2 43
Central West NSW — an overview 44
Blurred Boundaries 44
Agricultural land and sector characteristics 45
Agricultural Production 47
Gross Regional Product 48
Employment 48
Agricultural Jobs 49
/ Value Adding to Agriculture in Central West NSW / 3
Livestock 50
Sheep 50
Beef 51
Pigs 51
Poultry — meat 52
Poultry — eggs 52
Goat 53
Deer 54
Alpaca 54
Export Opportunities 54
Horticulture 56
The changing wine industry in Central West NSW 57
Protected Cropping 58
Export Opportunities 59
Irradiation 61
Dairy 62
Export Opportunities 63
Investment in Dairy 63
Wool 65
Alpaca fibre in Central West NSW 66
Export Opportunities 66
Broad-acre cropping 67
Export Opportunities 69
Survey Analysis 70
Key Observations 72
Jobs & Skills 72
Agricultural Sectors 72
Export Opportunities 72
Regional Innovation Hubs 72
Biotechnology 73
Digital Technology 73
Processing and Packaging 73
Branding 73
Collaboration and Co-operation 74
Freight and Logistics 74
Bibliography 75
4 / Value Adding to Agriculture in Central West NSW /
Introduction
This study was born of a The Central West and The Central West currently
mutual recognition across key Orana Regional Plan (Draft) exports 65% of its agricultural
stakeholders and government specifically states that; “the NSW production in commodity
bodies in the region, including Government will work with form.2 This shows that despite
Regional Development Australia Regional Development Australia the number and variety of
Central West, NSW Department Central West and Industry NSW to agribusinesses and food
of Industry (Western NSW), prepare and implement a value- enterprises, the majority of
the Department of Premier adding strategy for the Central wheat, livestock and horticultural
and Cabinet and Central NSW West area.” products currently leave the
Councils (Centroc), that a food region without additional
and fibre strategy was needed Debate rages over whether value adding.
to ensure a sustainable, diverse agriculture will replace mining
agricultural economy reflecting as Australia’s next big boom This report reviews current
the changing global landscape. to become the “food bowl of agricultural value adding tends
Asia”. There is, however, general and opportunities in Central West
In 2016, NSW Department consensus that, due to the NSW, with particular focus on
of Planning and Environment growing Asian middle class, the categories of biotechnology,
released two reports relating to a well-managed Australian digital technology, processing
agriculture and broader regional agriculture has a bright future. and packaging, branding, and
development and planning for co-operation and collaboration.
the Central West and Orana Agriculture represents 7.7% of The report relies heavily on the
regions; Central West NSW’s GRP and is a case studies of Central West
1. Central West and Orana key industry for the region.1 agribusinesses.
Agricultural Industries Report
(Jan 2016) 1 Regional Development Australia Central 2 Ibid
2. Central West and Orana West (2014) NSW Central West Export/
Import Contribution Study
Regional Plan Draft (April
2016)
/ Value Adding to Agriculture in Central West NSW / 5
Scope and Purpose
The purpose of this report is to The most significant aspect of business information including
provide deeper analysis of the the project was the interview approximate annual turnover,
agriculture sector in Central West stage, which involved face- number of staff, location and core
NSW including the current value to-face meetings with over business type. The survey asked
adding landscape. This report twenty regional agribusinesses. participants why their business
assesses trends across various Individual case studies and was based in Central West
agricultural sectors, considers business perspectives form a NSW and the advantages and
domestic and international key component of the report. disadvantages of their location.
market demand trends and All interviews were followed Participants were also asked
factors such as Free Trade up with phone calls and emails to describe any value adding
Agreements that may impact and subjects were given the activities they were currently
future growth, and identifies opportunity to proof read engaged in or planned to
promising opportunities to transcripts of their interviews engage in.
increase the extent of value- to ensure no information of
adding in niche areas. This report a commercial in confidence Over 100 surveys were
relies heavily on the experiences nature was revealed. Developing distributed through various
and insights of regional and maintaining trust with local food and agribusiness networks
agribusiness case studies. businesses was imperative in including RDA Central West’s
order to ensure meaningful own database, Agribusiness
Methodology participation in the process. Today forum members (including
regional LLSs), Farmers’ Markets
The first stage of this report During the case study process, networks and through RDA
involved the completion of a four key agribusinesses were Central West’s social media
comprehensive literature review selected to be interviewed, pages (Twitter and Facebook)
and desktop study. Sources used resulting in the production of and newsletter. Surveys
include industry and academic a two-minute video showcase completed and returned for
research papers, government designed to be used on a analysis represented a range
reports and media commentary variety of mediums to promote of agricultural sectors and
covering regional, national and investment and agribusiness in businesses including dairy, meat,
global issues relating to the Central West NSW. horticultural and grain producers,
broad field of value adding to organic farmers, wine producers,
agriculture and current trade The five key “value-adding” bee keepers, cheese makers,
opportunities. Please refer to categories featured in this fibre and meat processors and
the bibliography for a full list report (biotechnology, digital packaging enterprises.
of sources. technology, processing and
packaging, branding, and
The second stage involved collaboration and co-operation)
stakeholder consultations were identified as a result of the
including State and Federal stakeholder engagement and
Government departments, individual business case studies.
research and academic
institutions, banks, industry The final stage of the project
bodies and individual businesses. involved the development,
Please refer to the stakeholder list distribution and analysis
at the end of this document for of an on-line survey. The
more information. survey established basic
6 / Value Adding to Agriculture in Central West NSW /
Key Observation accessibility to major centres; supply chain may present
Highlights // Existing industry confidence opportunities for some niche
in the region with two private sectors.
Jobs & skills enterprise biotechnology
ventures already operating; Investment in innovative
Although it is one of the most // The location of the NSW processing and packaging R&D
important sectors and employers Department of Primary and infrastructure may create
in the region, jobs are shrinking in Industries; new opportunities for both
agriculture in Central West NSW. If // The region’s close ties with domestic and export value
the region is to leverage the value Charles Sturt University adding to a broad range of
adding opportunities afforded and the Graham Centre for agricultural sectors in the region.
by the predicted growth of the Agricultural Innovation;
agricultural industry, it will have // The region’s attractiveness Branding
to consider the consequences to higher skilled workers
and develop strategies to manage (affordable housing, cost A unified approach is needed,in
shrinking jobs and skills gaps. of living, work/life balance, collaboration with existing
schools and higher educational destination marketing, to
Export and domestic facilities, medical services and regional branding between Local
markets specialists and culture.) Government Areas, Regional
// The region’s status as one Tourism Organisations and
Considerable growth demand of seven “centres of regional agricultural stakeholders to
expectations in middle class growth” Australia-wide develop an authentic, effective
Asian markets, and various expected to contribute over regional agricultural brand.
trade agreements with those $15b to the national economy
regions, will create significant in 2031.3 Maintaining and protecting our
opportunities for Central West “clean and green” reputation
agricultural products, including Digital Technology is critical to the region’s ability
premium pre-packaged cuts of to command high global
meat and fresh, packaged or Advances in digital technology prices for agricultural products.
processed horticultural produce, are creating myriad opportunities International competition to be
which are key strengths of the for on-farm and post farm “clean and green” means Central
region. gate value adding. There is an West NSW needs to remain
urgent need for robust, future- vigilant and unified in this space.
The ability to transport produce proof and wide-reaching
by air from Canberra to telecommunications capabilities Collaboration & Co-Ops
Singapore — and 11 Chinese cities in Central West NSW, specifically
connected through Singapore — the rectification of mobile There may be a need for
is a potential game-changer for blackspots and sufficient NBN continued advocacy to ensure
agricultural exports from Central capacity, without which the regional agricultural co-
West NSW. agriculture sector will not be operatives are not excluded for
able to grow domestically or eligibility for government grants
Biotechnology compete on an international on the basis of their business
Innovation Hub level. Growth in the region is structure.
currently stunted by inadequate
Central West NSW is ideally telecommunications. Freight and logistics
placed to be an Innovation Hub
for research and the application Processing and Packaging Connectivity to market is a key
of biotechnology in agriculture challenge for Central West NSW
due to: Processing weaknesses in the agricultural SMEs.
// The region’s diversity of high Central West NSW agricultural
quality agricultural produce; For a full list of key observations
// The region’s proximity and 3 Commonwealth Government, (2016) see pages 72–74.
Australian Infrastructure Plan, pp 60–61
/ Value Adding to Agriculture in Central West NSW / 7
Part 1
// Agritechnology, Borenore. Photo Kate Barclay.
8 / Value Adding to Agriculture in Central West NSW /
Value Adding
Value-adding includes any // Precision agriculture5 is In Central West NSW,
process or service in the supply creating opportunities for organisations such as the farmer-
chain that adds to or enhances farmers to optimise returns driven Central West Farming
the value of products to on inputs while preserving Systems exist to trial and research
customers. Value-adding may resources; new farming methods and
include supplying new products // Intensive livestock farms innovations, to share knowledge
or different varieties, changing can earn carbon credits by and create valuable farming and
presentation to meet market capturing methane gas for agribusiness networks. Local
requirements, providing expertise the Government's Emissions Land Services bring together
and/or services and promotion Reduction Fund, and many are agricultural production advice,
and marketing activities to converting biogas into energy. biosecurity, natural resource
differentiate products.4 management and emergency
With these technological management into a single
Value adding to agriculture is opportunities come challenges, organisation. NSW Farmers’
about finding ways for farmers such as the continued struggle “AgInnovators” is a news and
and agribusinesses to move for farmers and regional information site designed to
from being “price takers” to communities to have adequate connect the world of technology,
“price makers”. telecommunications capabilities business and communication
to take advantage of new with leading agricultural thinkers.
In agriculture, value-adding can technologies and growing
be achieved on-farm, post farm data needs. While, on-farm value adding
gate, or as a combination of the represents significant
two. On-farm value adding can In keeping with its Innovation opportunities for agriculture in
be achieved through harnessing Agenda, the Federal Government the Central West, the main focus
science and new technologies has developed a “Farming of this report is post farm gate
to create greater efficiencies and Smarter” section within the value adding.
cost competitiveness in farm 2015 Agricultural White Paper,
production. For example; addressing the need for Australian Key Observation
// Advances in biotechnology agriculture to continue to have
are increasing the genetic access to the most advanced While farmers and
performance of animals; farming technologies and agribusinesses continue
// Increasing competition and practices, as well as the skills to strive towards cost
cost of labour is leading to the and labour to drive innovation efficiencies, largely through
development and adoption of and growth. digital and bio technological
new technologies, software, advances, they struggle to
mechanisation and robotics; 5 “Precision agriculture provides the compete with Asia on price
means for measuring the variability competitiveness. However,
observed in crop yield and quality
4 Commonwealth Department of parameters. Precision agriculture tools they can compete on quality
Agriculture, Fisheries and Forestry (1999) also provide the means for site specific and uniqueness — by value
Increasing Value-adding to Australia’s raw crop management and when combined
materials. adding to their product and/
with traditional agronomy tools, can
lead to improved crop yields, quality and or marketing and ensuring
efficiency of crop production.” Society that quality and authenticity
of Precision Agriculture Australia (2014)
Strategic Plan, available from http://www. can be verified and traced.
spaa.com.au/strategic-plan.php
/ Value Adding to Agriculture in Central West NSW / 9
Agricultural sectors are One of Central West NSW’s
increasingly realising the value of most significant agribusinesses,
moving away from “commodity- MSM Milling in Manildra, is a
based” marketing and into more commodity based (canola)
“value-based” marketing in order business with a growing focus on
to ensure long term profitability value-adding, through research
and sustainability. and development and packaging
and processing, to its high quality
The Cattle Council of Australia, vegetable oils and stock feed.
for example, recently released
its five-year industry assessment Post farm gate value adding
advocating for a shift towards can be achieved through
‘value chains’ rather than ‘supply various methods. As a result
chains’ and the production of of consultations with regional
beef that is ‘fit for a purpose’. stakeholders and agribusinesses,
The plan describes the needs the following value-adding
of consumers from paddock categories have been developed
to plate as the foundation of a and will be further explored in
comprehensive industry plan this report;
aimed at building long-term
profitability into grass fed beef
production.6
Value adding through
6 Cattle Council of Australia (2015) Biotechnology
National Strategies for Australia’s Grassfed
Beef Sector, available from http://www.
cattlecouncil.com.au/assets/documents/
Beef%202015%20and%20beyond.pdf
Value adding through
Digital technology
Value adding through
Processing & packaging
Value adding through
Branding
Value adding through
Collaboration &
co-operatives
10 / Value Adding to Agriculture in Central West NSW /Biotechnology
“Bioscience is critical for the world not just for the
Central West. We need to develop systems to add
value to horticulture, agriculture, food waste so that
we can reuse, recycle all of those things we need
to do; we all know we need to do them. Bioscience
gives us a natural means of doing that.”
— Derek Robinson, Business Development Manager, Agritechnology
Agribusiness can add value to reduced chemical use or through between diet and health, and
products by harnessing science the development of alternative the move towards preventative
to create greater efficiencies, cost fuels (biofuels) made from plant health and wellness in an
competitiveness and premium and plant-derived resources. ageing population.
products.
After conducting primary Functional foods may include, for
According to the Convention research through consultation example, high antioxidant fruits
on Biological Diversity, with local agribusinesses and such as the Queen Garnet Plum,
biotechnology refers to “any secondary research through a new plum variety developed
technological application that international market analysis, by the Queensland Department
uses biological systems, living three areas of opportunity for of Agriculture, Forestry and
organisms, or derivatives thereof, Central West NSW agriculture Fisheries. It may also include
to make or modify products or in biotechnology have been value added food ingredients
processes for specific use”.7 This identified; such as oils, vinegars, whey
may include, for example, using 1. Functional Foods protein powders, freeze dried
bacteria to make yogurt, cheese, 2. Protein and Animal Feed powders and yeasts.
and vinegar, or the use of plant or 3. Bioenergy
animal cross-breeding techniques “I believe that in the future we
to produce stock with enhanced Functional Foods will have grain varieties with
qualities. Biotechnology includes, enhanced health properties
but is not limited to, genetic Increasingly, biotechnology is that will attract a premium in
modification (GM). playing a role in value adding the market.”
through the development of
Biotechnology has a critical agricultural products with greater — Professor Chris Blanchard,
role to play in helping to deal health benefits. Functional Grains Centre, Wagga
with emerging challenges Wagga
facing agriculture, including “Functional foods” or
climate change, pressure on “nutraceuticals” are food products Key Observation
global food supplies and the that have been manipulated in
management of pests and order to deliver perceived health Agricultural sectors in
diseases. Biotechnology can also benefits to consumers. Functional Central West NSW with
benefit the environment, through foods are a growing field in significant “functional foods”
food science and biotechnology potential include grain
7 Ruame, J. (2001) Agricultural due to advances in technology, and oil seeds, horticulture
Biotechnology for developing countries,
Food and Agriculture Organisation of the health-conscious consumer and dairy.
United Nations interest in the relationship
/ Value Adding to Agriculture in Central West NSW / 11engineering support we need to
run a plant here — the Central
West still allows us to have access
to all of that.”
Agritechnology has formed
wholly owned subsidiaries and
joint-venture companies to
further the commercialisation
of a number of its discoveries.
One such company is Australian
Functional Foods Pty. Ltd. (AFF).
Using technology developed by
Agritechnology, AFF processes
// The Agritechnology site was originally a vineyard. fresh fruit and/or vegetables into
premium healthy functional and
nutraceutical food and beverage
Case Study: Agritechnology — harnessing science to products.
create new agrifood opportunities
Being located in a major cherry
Agritechnology is a bioscience “Agritechnology is a world class growing region where second
company developing new outfit, our market is global,” says grade cherries represent about
products and processes Derek. “Our customers come 20–50% of the annual cherry
for clients in agriculture, from all around Australia for crop, Agritechnology recognised
nutraceuticals, biofuels, and our continuous fermentation the opportunity to value add
food and beverage production. expertise particularly. to the significant cherry waste
Agritechnology is a business that stream in the region by extracting
Overlooking the rolling hills of allows us to pursue real science, nutraceutical compounds and
the Orange Wine Region, the real business opportunities and converting waste cherries
Agritechnology HQ originally yet still live in such a great place. into food.
functioned as a vineyard and There’s about thirteen of us on
winery. Over the years, the site in Orange, it varies a little Cherries have substantial levels
vineyard business was scaled bit project to project. People of anthocyanin (an important
back and the bioscience work are drawn literally from all over antioxidant) with nutraceutical
scaled up on location. The the world. We have people from properties including for gout,
winery infrastructure and Pakistan, French Reunion, from inflammation and other health
equipment now forms part of India, from China. We have benefits. Cherries are also a
the plant used for bioscience brought people back to Australia recognised low-GI food and
research and production. from Sweden who are working cherry-derived products appeal
over there. It’s quite a melting to the diabetic market in
“Bioscience is critical for the pot here.” particular.
world, not just for the Central
West,” says Derek Robinson, “Our physical location is The Agritechnology team
Business Development Manager fantastic for us. We are an R&D applied its expertise in food
at Agritechnology. “We need to company that works with fruits science to develop a process to
develop systems to add value and vegetables, [and] with [the] create a cherry juice with shelf
to horticulture, agriculture, food grain belt. Where we are we stability, high yield, good texture
waste so that we can reuse, have got canola and wheat and flavour and high levels of
recycle all of those things we within an hour, and we’ve got anythocyanin. The team also
need to do, we all know we need fruit and vegetables just over developed a functional food from
to do them. Bioscience gives us a the hill. Mixed horticulture, it’s the cherry waste in the form
natural means of doing that.” fantastic for us. But more than of a powder with a strong red
that we’ve also got access to the colour, intense cherry flavour, and
12 / Value Adding to Agriculture in Central West NSW /antioxidant profile demanded
by ingredient distributors and
food manufacturers.
“I think there’s a recognition
that agribusiness and adding
value to our agricultural
production is attractive in the
investment world generally at
the moment. Orange is seen as
an R&D base and the Central
West is seen as a ‘hub’, so that
works to our advantage in
attracting investment as well.”
— Derek Robinson, Business
Development Manager at
Agritechnology.
// The Agritechnology team. Photo Kate Barclay.
/ Value Adding to Agriculture in Central West NSW / 13Case Study: Botanical Innovations — the fusion of Global trends and
technology and botany market opportunities for
Functional Foods
Botanical Innovations, a biotech The company can manufacture
start-up based in Orange, looks liquids, solids and powders. There is an increased demand
like the basement of Willy Specific capabilities include for healthy functional food both
Wonka’s Chocolate Factory. Vats, essential oil manufacturing, domestically and internationally,
pools, pipes, valves, gauges and cold pressed oils, drum and especially in growing middle
pumps fill the 550 sq. metre spray drying and powder classes of Asia.
shed on the outskirts of town, manufacturing, extruding
where Managing Director Kerry for product and ingredient The functional food
Ferguson can be found deeply manufacturing and packaging.
engrossed in the innovative R&D
market was worth
phase of her business. Things are moving quickly for
Botanical Innovations, which
$US25 billion
Combining herbs, fruits, was established in late 2014 and globally in 2011, yet
vegetables, plants and woods already has investors and markets Australia had only a
with the latest technological showing a keen interest in its
advances in extraction,
purification and packaging,
range of products. 1.6% share. 8
Botanical Innovations “Having finally worked out how Strict regulations on health
manufactures botanical extracts, best to package my vinegars, claims have made Europe a
essential oils, flours and oil for the oils and extracts I am about to centre for clinical trials in the
food, nutraceutical, medical and commence exporting,” says Kerry. functional food market. Until
cosmetic industries. “I have worked with a business March 2014, the European Food
partner in India for many years Safety Authority (EFSA) had only
The company’s location, in the and will be exporting Botanical approved 254 health claims out
heart of Central NSW, provides Innovations products to India.” of the 2,242 submitted.9
proximity to a wide range of raw
materials, including horticultural Kerry, who has a corporate Japan, on the other hand, has
“waste” such as apples, cherries background in health care and become a test hub for innovation.
and grapes. agribusiness, says Southern Cross In early 2014, total approvals
University, Austrade and industry in Japan had reached over
Botanical Innovations products specific trade fairs have been 1,100; five times higher than the
include apple, grape and cherry key to establishing contacts and number of approvals in Europe,
seed oils, vinegars and phenolic networks in this critical start-up standing out among developed
extracts. Botanical Innovations phase of the business. countries for the range of health
also manufacturers Australian ingredients.10
Buddha Wood essential oil Key Observation
and industrial fumigants and This has made Europe a hard
disinfectants formulated from There is value to be realised market for manufacturers of
essential oils. from agricultural waste functional foods, but one with
streams, currently being high standards for health claims.11
Botanical Innovations done with cherry waste
services include research streams in the region and The largest number of functional
and development, pilot could also be applied to food and drinks consumers is in
manufacturing, market testing, grapes, apples, olives and
business planning and market other stone fruits which 8 Charles Sturt University, (2013) New
$2.1 million grains and research centre at
entry, commercial manufacturing are produced in significant
CSU, ://news.csu.edu.au/
and formulating. quantities in the Central West
9 Ibid
NSW region.
10 Ibid
11 Langley, S. (2014) Ausfoodnews.com
The future of functional food regulation,
Canadean, July 14
14 / Value Adding to Agriculture in Central West NSW /the US — especially as a market
for lifestyle health products.
Emerging hubs such as China,
India and Brazil are also likely to
exert significant influence over
the functional food and drinks
market in the future.
Demand for functional food
is being driven worldwide by
a growing interest among
consumers in health and
wellbeing, due to an ageing
society and increasing prevalence
of lifestyle related diseases.
The functional food market
is particularly strong in Asia
with growing opportunities
for businesses operating in the of animal feeds which are “We are looking at
Australian food industry.12 considered safe, appropriate and opportunities to extract
cost-effective.14 proteins from pulses and
Australian-based businesses are use them as high value food
in a good position to market The Protein Challenge 2040 is a ingredients. We are also
functional food products global coalition of organisations working on incorporating
effectively, with Australia having and NGOs exploring how omega-3 unsaturated fatty
a strong reputation in credible we feed nine billion people acids in animal feed so that we
research (despite ranking enough protein in a way which can produce premium meat
low worldwide in terms of is affordable and good for the products... I believe that in
commercialisation13), and general environment. A key priority is the future we will have grain
food and product safety. to scale up sustainable feed varieties with enhanced health
innovation to meet the consumer properties that will attract a
Protein and demand for animal protein. premium in the market. We
Animal Feed are working on wheat varieties
14 Protein Sources for the Animal Feed with reduced allergenicity
Industry FAO UN 2004 http://www.fao.
Rapid income growth in Asia properties. We’re working on
org/3/a-y5019e.pdf
is associated with an increased new high value options for
demand for high protein foods canola meal. We also think
such as meat, fish, milk and eggs. there is a lot of potential in
Meeting the growing consumer new uses for protein isolated
demand for meat, milk, eggs from pulses.”
and other livestock products is — Professor Chris Blanchard,
dependent to a large extent on Functional Grains Centre, Wagga
the availability of regular supplies Wagga15
12 corrs.com.au (Sept 2014) Marketing 15 Professor Chris Blanchard, email
Functional Foods in Australia — How interview 20 April 2016
to navigate the rules on health and
therapeutic claims
13 OECD ranking of Australia globally
in terms of research, as referred to in
the National Innovation and Science
Agenda (high in research, low in
commercialisation). http://www.
innovation.gov.au/page/national-
innovation-and-science-agenda-report
/ Value Adding to Agriculture in Central West NSW / 15Case study: Research finding new ways to turn Global trends and market
commodities into value added products. opportunities for protein
and animal feed
The Australian Research Council healthy food or food with novel
(ARC) Training Centre for applications," Associate Professor The Farm Animal Production
Functional Grains, funded through Blanchard said. industry has performed well
the Industrial Transformation despite difficult trading conditions
Training Centres program from “What is called the 'functional over the past five years. Volatile
2014 to 2016, is a research hub food market' was worth $US25 weather patterns and resulting
for grain scientists from Charles billion globally in 2011, yet shifts in demand for animal
Sturt University (CSU), NSW Australia had only a 1.6 per feed, fluctuating grain prices
Department of Primary Industries cent share." and strong competition in the
(DPI) and CSIRO, with a focus on industry have contributed to
three commodities — rice, pulses, CSU Vice-Chancellor and President revenue movements over
and canola. Professor Andrew Vann praised the period.
Associate Professor Blanchard
Also involved is the Graham and his team for securing the The proportion of grain being fed
Centre for Agricultural Innovation competitive ARC funds. to livestock has been increasing.
— a collaborative research This places more significance
alliance between CSU and NSW “Charles Sturt University's position upon Australia having a
DPI. Other partners include Grain in the food bowl of Australia consistent and reliable source of
Growers, MSM Milling, Flavour offers natural linkages between animal feed grains into the future.
Makers, Teys Australia, Woods researchers and food-processors The major companies in the
Grains, Grains and Legumes of these major commodities."16 animal feed industry, which earn
Nutrition Council, Grains 90.9% of industry revenue, have
Research and Development May 2016 Update — The ARC remained profitable by reducing
Corporation and Rural Industry ITTC funding was only for 3 their exposure to market supply
Research and Development years from 2014 to 2016 and volatility through sheer size.17
Corporation. there is currently no opportunity
for extension. Animal feed industry revenue
"Rice, pulses and canola account is projected to grow at 3.6%
for $2.5 billion of earnings when Key Observation per year over the five years
sold as commodities, with even through 2015–16 as demand
greater economic potential for Research, development and increases both domestically and
the Australian economy through training to assist Central internationally. According to
value-adding." West NSW producers the Stock Feed Manufacturers'
supply worldwide demand Council of Australia (SFMCA),
The aims of the Centre include: for sustainable, quality the major risk Australia faces is a
identifying the preferences of protein and animal feed for nationwide drought that extends
Australian and international grain both human and animal over two winter cropping years
customers; improving grain consumption respectively affecting the supply of animal
storage; developing new grain- should be encouraged and feed.18
based products with enhanced supported.
sensory and health attributes: 17 ibisworld.com.au, (2015) Farm Animal
and training the next generation Feed Production in Australia: Market
Research Report, July http://www.
of food science researchers. ibisworld.com.au/industry/farm-animal-
feed-production.html
“We want to transform the three 16 Charles Sturt University News (2013), 18 Ibid
New $2.1 million grains research centre
commodities by examining the at CSU, 19 Dec http://news.csu.edu.
functionality of food, particularly au/latest-news/agricultural-science/
food-production/new-$2.1-million-grains-
the growing demand for research-centre-at-csu
16 / Value Adding to Agriculture in Central West NSW /The Australia Meat Processing
industry has performed strongly
over the past five years. A mature
domestic market has constrained
local consumption of industry
products, with the exception of
premium and organic products.
However, rapidly rising demand
for Australian meat, particularly
beef, in export markets has
contributed to strong industry
revenue growth over the past
three years.
Industry revenue is forecast to
grow at an annualised 9.0% over
the five years through 2015–16,
to reach $19.4 billion. Despite
ongoing strong demand from
export markets, industry revenue
is projected to grow at a more
subdued 5.8% in 2015–16.19 // MSM Milling silos
19 Ibid
Case study: MSM Milling — Providing stockfeed
to the world
In 2008, MacSmith Milling they are experiencing favourable
Manildra (MSM Milling) was growth and conditioning
formed to produce canola oils for using the pellets. International
industrial and retail markets under producers are also benefitting,
The Healthy Baker and Manildra including dairy farmers in
Gold brands. New Zealand.
MSM Milling’s decision to re- In 2015, MSM Milling joined
invest in the Manildra site to forces with the Manildra Group
allow for further value adding has and Oilseed Products (OSP) NZ
resulted in locally grown canola to form Manildra Stockfeeds
being transformed into stockfeed New Zealand.
which is sold both domestically
and internationally. MSM Milling’s range of stockfeed
is constantly expanding, with
The feed mill produces protein specialised pellets now available
and energy-dense pelletised for beef and dairy cattle, dairy
stockfeed, using canola meal goats and lambs.20
and oil products as well as local
wheat and barley and products
from the Manildra Flour Mill.
Some local award-winning
producers have indicated that 20 MSM Milling (2015) Year in Review
Newsletter, Stockfeed to the world
/ Value Adding to Agriculture in Central West NSW / 17Bioenergy An example of how this Corporation (RIRDC) to undertake
could be developed is evident a comprehensive assessment
Bioenergy is produced through in the work of Regional of using biomass for bioenergy.
the conversion of biomass (solid Development Australia Orana, This project is set to identify new
or liquid) to electricity and heat which neighbours the Central opportunities and make it easier
via processes of combustion, West NSW region. RDA Orana to develop biomass generation
fermentation and digestion. have been working with local and biofuel projects in Australia.
Bioenergy has the potential to councils, businesses and
play a significant role in providing industry to progress investment RIRDC plans to geospatially
future biofuels and electricity to in a regionally-based BioHub, map existing and projected
the region. ultimately leading to the biomass resource data alongside
establishment of a network of other parameters such as
Agriculture can provide a range Hubs across the region and existing network and transport
of feedstocks such as woody developing new supply chains infrastructure, land use capability
biomass, crop residues, oil seed in an emerging ‘bio economy’.22 and demographic data.
crops and tallow for bioenergy. Stakeholders perceive a range
of opportunities arising from “This will provide better linkages
Key Observation establishing a BioHub to between biomass suppliers and
transform invasive woody weed end users and support local
Biofuels and bioenergy species into bioenergy in areas of businesses to get more value
present new opportunities Western NSW.23 from organic material destined
to value add across all for landfill, disposal or other low
agricultural sectors of Central Global trends and value uses,” says ARENA CEO,
West NSW including broad- market opportunities for Ivor Frischknecht.24
acre cropping, forestry, bioenergy
dairy, horticulture, beef and The first iteration of the database
intensive livestock. Bioenergy has the potential is planned for release in late 2016.
to play a crucial role in the
A Victorian Government report21 provision of sustainable energy. According to ARENA, Australia’s
found that bioenergy production However, bioenergy’s potential bioenergy use is projected to
could assist the development of in Australia is yet to be fully increase by 60% from 2007–08
regional areas in a number of realised and its fortunes will likely to 2029–30. There is potential
ways including; be influenced by Government to expand Australia’s bioenergy
// Reducing greenhouse gasses, incentives and various State sector with increased utilisation
such as biogas being captured Government requirements for of wood residues from
and used to generate power greenhouse gas mitigation, in plantations and forests, waste
// Providing additional electricity the absence of well-established streams and non-edible biomass.
for expansion of regional markets in this area.
industries Global demand for bioenergy
// Using waste streams through The Australian Renewable Energy resources is expected to increase
processing agricultural Agency (ARENA) announced in with the projected growth in
produce January 2016, $3 million funding bioenergy use. In the short-
// Providing alternative options support for the Rural Industries term, demand for bioenergy
for land use, should warmer Research & Development resources are likely to be met by
and drier weather experienced sugar, starch and oilseed crops,
in the recent past continue 22 Further information in the Dubbo as well as utilising the large
Biohub Project is available at http://www.
into the future volumes of unused residues and
rdaorana.org.au/our-initiatives.htm
// Providing employment in
23 Cobar Weekly (2016) RDA says a
regional areas biohub might not be just a pipe dream 24 Australian Renewable Energy Agency
http://cobarweekly.com.au/?p=1279 (Jan 2016) National bioenergy database
to create new opportunities http://
21 State Government of Victoria (2010) arena.gov.au/media/national-bioenergy-
Bioenergy from Agriculture http:// database-to-create-new-opportunities/
agriculture.vic.gov.au/agriculture/food-
and-fibre-industries/industry-profiles/
bioenergy-from-agriculture
18 / Value Adding to Agriculture in Central West NSW /wastes. Lignocellulosic25 crops Case Study: CLEAN Cowra Key Observation
are expected to contribute in — Developing a model to
the medium-to long-term and convert locally-sourced Central West NSW is well
algae could make a significant biomass into cost placed to be an innovation
contribution in the longer term.26 competitive energy hub for research and
application of biotechnology
“There is a widespread Cowra Low Emissions Action in agriculture for the
scientific consensus that Network (CLEAN) Cowra is following reasons;
agriculture (including the a community-based group // significant diversity of high
agrifood chain) and, more advocating for a decentralised, quality agricultural produce;
generally, the rural sector has aggregated biomass-to-energy // proximity and accessibility to
considerable potential for model to be developed that Canberra and Sydney
providing renewable energy, could service local agricultural // existing market attraction
both by supplying the biomass industries by using produce and — two private enterprise
(including waste products) waste, subsequently providing biotechnology ventures
needed as feedstocks for a platform for sustainable already operating in Orange;
various forms of renewable economic development. // location of the NSW
energy, and by utilising the Department of Primary
spatial dimension of rural land The Cowra biomass project Industries;
(much of which is under the estimates it will produce around // the region’s close ties with
ownership of farmers) as a 60% of Cowra's energy needs Charles Sturt University
catchment area for the ‘free’ at full capacity. It would involve and the Graham Centre for
resources wind and construction of a biomass Agricultural Innovation;
solar energy.” plant — an initial 2MW version // attractiveness of the region
— OECD report on is estimated to cost around $8 to higher skilled workers
Sustainable Agriculture27 million. (attractions include affordable
housing, cost of living, work/
25 The Oxford Dictionary defines The Initial Project Scoping life balance, schools and
lignocelluose as “a complex of lignin
Review of CLEAN Cowra university, medical services
and cellulose present in the cell walls of
woody plants”. suggests it could provide a best and specialists and culture.)
26 Geoscience Australia and the Bureau practice waste processing and // the region’s status as one of
of Resources and Energy Economics energy supply model that can seven “centres of regional
(2014) Australian Energy Resource
Assessment 2014, Chapter 12 — be implemented elsewhere growth” Australia-wide
Bioenergy in regional areas, given the expected to contribute over
27 Burrell, A.(2010) Renewable energies availability of appropriately $15b to the national economy
from the rural sector: the policy zoned and serviced blocks in 2031.28
challenges, available at http://www.
oecd.org/greengrowth/sustainable- of land.
agriculture/48309185.pdf 28 Commonwealth Government, (2016)
Australian Infrastructure Plan, pp 60–61
/ Value Adding to Agriculture in Central West NSW / 19Digital Technology
Across all agricultural sectors, “Lack of reliable access to Digital Platforms
digital technologies are radically internet and mobile coverage connecting
changing agricultural business is one of the most restrictive agribusiness to
models and providing significant elements in preventing the capital
opportunities for value adding. wider uptake and adoption
of existing and emerging Lack of capital and land assets
While precision agriculture, technologies in Australian are a significant impediment
mechanisation and robotics agriculture… (there is) dire to growth and value adding
all contribute to value adding need for better and more for agribusiness in the region.
on-farm, this report focuses reliable regional and remote New online platforms, such as
on the post-farm gate digital internet and mobile access”. Condobolin-based AgValue,
technology opportunities — Grains Research and are being developed to expand
including E-commerce, which Development Corporation30 the range of capital available to
is providing new and more agribusinesses, including sourcing
direct pathways to market both Key Observation alternative investment methods
internationally and domestically. and connecting investors with
Advances in digital family farms and agribusinesses.
New methods of ‘traceability’ are technology are creating
important as the provenance and myriad opportunities for Andrew and Nadia Hulme from
safety of food becomes critical to on-farm and post farm gate Adagio Alpaca Mill in Orange,
the competitiveness of products value adding. used digital platform ‘Kickstarter’
in the international market and to create a crowdfunding
increasingly the domestic market. There is an urgent need campaign and raise $21,000
for robust, future-proof of start-up capital for the mill.
The Digital Divide and wide-reaching Although Kickstarter raised the
telecommunications $21,000 sought, a significant
With these opportunities capabilities in Central amount of work and costs were
come challenges, most West NSW, specifically involved in the process. Raising
notably the continued struggle the rectification of mobile capital to start the venture has
for farmers and regional blackspots and sufficient been a major impediment.
communities to have adequate NBN capacity, without
telecommunications capabilities which the agriculture sector Key Observation
to take advantage of new will not be able to grow
technologies. domestically or compete on While advances in digital
an international level. Growth technology and applications
The Agricultural White Paper in the region is currently are creating new avenues
addresses the need for Australian stunted by inadequate for capital-raising, finances
agriculture to continue to have telecommunications. remain a major impediment
access to the most advanced for start-ups. Although
farming technologies and 30 The Land (2016) Regions Wait for grants and other assistance
practices, as well as the skills and Digital Revolution, 4 April are available for expanding
labour to drive innovation and existing business activities,
growth.29 research and development,
innovation and exporting,
29 Commonwealth of Australia (2015) there are no grants available
Agricultural Competitiveness White Paper,
http://agwhitepaper.agriculture.gov.au/
for starting a business in
SiteCollectionDocuments/ag-wp-chpt4- Australia.31
farming-smarter.pdf
31 Australian Small Business
Commissioner http://www.asbc.gov.au/
20 / Value Adding to Agriculture in Central West NSW / resources/faq/funding#t36n167Case Study: Bryton Wool — video sales platform
connecting Regional Australia to the world
Geoffrey Beath, Managing Partner samples online which eliminates
of Bryton Wool in Canowindra, the need to display sample at
says the success of his wool a show floor, giving buyers the
buying and brokering business ability to view wool samples from
is due to a continuing push for anywhere in the world.
expansion and keeping up with
technology in an ever-changing Geoffrey says he was inspired to
industry. develop the technology partly
due to the diminishing number
The business, established in of exporters in Sydney; a result of
1973 and taken on by Geoffrey declining wool production and
and his wife Sue in 1992, now the costs involved in displaying
has warehouses in Canowindra, wool in Sydney.
Young, Crookwell, Forbes and
Oberon, and around 4,000 “It just made sense to digitally
growers on the books. Business show samples,” says Geoffrey.
has grown solidly over the past
two decades, but it is in the “We went through some
last five years that the most experimentation with stills
significant growth has occurred but weren’t able to provide an
and it is all down to taking on accurate viewing of the wool.
digital innovation. Stills couldn’t provide enough
information regarding length,
“Currently at the Canowindra colour, style and crimp. We
store we have thirteen employees, needed to show movement.”
// Broadband technology used by eighteen employees total spread
Bryton Wool for digital trading out in four centres,” says Geoffrey. Broadband technology made
platform.
Photo Kate Barclay. “The people that are employed a video trading platform viable
here at Bryton Wool are all local in Canowindra. Bryton Wool
people. We have two new young invested around $18,000 in
juniors who have just started. developing its video trading
It’s a natural progression to bring platform, including purchasing
youth into the trade.” camera equipment, digital
platform software, data collection
“We source wool from as far west and storage capacity.
as Wilcannia through to Oberon,
down as far as Braidwood, “Once we were able to reliably
Bungendore across over to describe the wool our buyers
Tumut, Caragabal and as far north gained confidence in what we
as Yeoval and Euchareena. We do were selling and the true value of
cover a large area. Last year we the wool,” says Geoffrey.
put 25,000 bales through the shed
here. In a shrinking industry we Between 2012 and 2015, Bryton
find ourselves travelling to distant Wool increased the number of
areas to source our product.” bales handled from 18,000 to
25,000 with the help of the video
Since 2010, Bryton Wool sales platform they employed.
have been working on video
technology to display wool
/ Value Adding to Agriculture in Central West NSW / 21E-Commerce “The image of foreign products Recommendations are
as being cleaner and greener, expected to be, firstly,
E-commerce is the transaction and the many food safety establishing an e-commerce
for goods or services via the scandals in China, makes it flagship shop front site.
internet . hard to see Chinese customers Secondly, developing a project
switching to domestic that will look at what Chinese
E-commerce has revolutionised alternatives, no matter the consumers are searching for
the way business is conducted, price rise. While the price of and what are their shopping
from record and account keeping Australian milk powder and methodologies. Thirdly,
to marketing and promotion, vitamins will rise, so too will publishing fact sheets
banking, communication and the price of our competitors' which the agrifood export
product or service research. milk powder and vitamins.”33 can use as a source of
It provides agribusinesses the information and guidance
potential to reach new customers In 2014 the total sales value of when considering the China
anywhere in the world and to China’s e-commerce sector was e-commerce industry.
cut out the “middle men” in worth more than half a trillion — Dr Fay Haynes,
the supply chain. E-commerce Australian dollars. Around 90% NSW Department of
is opening up expanded sales of online shopping in China is Primary Industries36
avenues to niche value added transacted through e-commerce
agricultural products and marketplaces which have the 36 Ibid
commodity producers. potential to bring China's online
consumers within reach of even
Recent changes to China’s the smallest Australian exporters.34
e-commerce regulations mean
that from April 2016, goods The NSW Department of Primary
bought and sold online to China Industries are expecting to
will be subject to new duties. publish a review on the China
Some food suppliers, such as e-commerce sector by the end
powdered milk providers, will be of 2016.35 The intention of the
required to have their product review is to establish a body
licensed or re-licenced by China’s of knowledge on the nature of
food and drug regulators. e-commerce in China, what it
means for the Australian agrifood
Although China’s new industry, an understanding of
e-commerce duties are expected the e-commerce supply chains
to increase the cost of Australian and identification of areas of
goods by an estimated by 10–20%, inefficiencies.
Australian producers remain in
a strong position to capitalise 33 Ibid
on the huge Chinese market for 34 The Australian Trade and Investment
high end, reliable, clean food Commission, (2016) E-commerce in
China http://www.austrade.gov.au/
products.32 Australian/Export/Export-markets/
Countries/China/Doing-business/e-
commerce-in-china
32 Manuel, R (2016) China’s e-commerce
laws not a crackdown but closing a 35 Dr Fay Haynes, International
loophole, The Conversation, 1 April Engagement, NSW Department of
Primary Industries, personal conversation
and email, 11 May 2016
22 / Value Adding to Agriculture in Central West NSW /Case Study: Igrain — online trading platform for the grain industry
igrain.com.au is an online “Igrain assist farmers find the best ready for online transacting, he
grain trading platform based price for the grain on any given says things have changed rapidly
in Bathurst. The business was day that they sell,” explains Igrain over the past five years.
established in 2009 shortly after founder Tom Roberts. “We do
market deregulation in response this by providing access to more “(We) see opportunities for
to a specific need from grain buyers in the one location. We agriculture in greater adoption of
growers for greater pricing always ensure farmers will be technologies and improvements
transparency and a broader paid for what they produce by in freight and logistics to move
market access the grain buyers. underwriting every transaction what we produce here into key
with trade insurance. Growers markets,” says Roberts.
In 2015, igrain transacted 410,000 not being paid for grain is a huge
tonnes. The company has industry problem due to traders’ Robert’s cites good staff,
transacted close to 2 million going receivership.” technological capability, close
tonnes with over 260 grain proximity to markets and
buyers across QLD NSW VIC and While Roberts concedes they perseverance as key to igrain’s
SA since its inception. may have over engineered success in Central west NSW.37
technology in the early stages
when farmers where not quite 37 Email interview with Tom Roberts,
Founder igrain, Bathurst, 6 May 2016
Traceability The food traceability market is Traceability has been identified as
projected to reach $14 billion by one of the key global megatrends
“Consumers will be 2019. The Asia-Pacific is projected in agriculture. The ‘where did
“information-empowered” to be the fastest-growing market my food/fibre come from?’
and rural industries stand for food traceability, driven by the factor is a powerful motivator
to gain or lose market share technological advancement and for consumers. Establishing
based on this increase in growing concern for food safety provenance, quality and safety
consumers’ knowledge.” among consumers in developing will be key to attracting market
—CSIRO Megatrends Report38 countries such as India and premiums both domestically and
China.39 internationally in the future.40
Agribusinesses throughout the
food supply chain are using a Traceability can be provided at Key Observation
variety of digital traceability tools the item, case, pallet or container
to capture critical information level, through the use of smart Traceability is an increasingly
during the path from paddock farming sensor systems, Radio- important capability within
to plate. Traceability not only Frequency Identification tags the supply chain facilitated
provides reassurance of food (RFID), bar codes and QR (Quick by advances in digital
quality and safety, but also Response) codes, GPS satellite technology; in order to
creates branding and marketing locations, packaging, data loggers remain competitive this is an
opportunities to build a valuable and more. area in which Central West
connection between consumers NSW agribusinesses cannot
and producers. 39 Food Traceability Market Global Trend afford to lag behind.
and Forecast to 2019, Marketsandmarkets.
com; International Union of Food Science
38 Sandra Eady, Stefan Hajkowicz (2015), & Technology; US Food and Drug 40 New trends research predicts mega
Rural Industry Futures: megatrends Administration opportunities for Australian agriculture
impacting Australian agriculture over the as world grows hungrier, wealthier
coming twenty years, Rural Industries with fussier consumers by 2035, Rural
Research & Development Corporation & Industries Research and development
CSIRO Corporation, 14 Aug 2015 & Dr Stefan
Hajkowicz, CSIRO
/ Value Adding to Agriculture in Central West NSW / 23You can also read
