Our system at risk
Australia’s food system is more than 60,000 years old and has grown and evolved over 1,600 generations. It’s a system that’s served Australian’s well and underpinned much of our economic prosperity.
But it’s a system at risk. And nowhere is the threat larger or more real than in the domain of food fraud. Unfortunately, for many, it seems to be a lower-order issue.
Driving this complacency is the fact that, as consumers, we have been relatively immune from many of the scandals that have plagued the industry globally. Save for one or two examples, contaminated food scandals seem to be something that happens elsewhere. But to ignore the issue is to misinterpret the economic danger it poses to a crucial pillar of our economy.
The total value of Australian agriculture and food exports is approximately A$45 billion annually. When you consider that fraud is estimated to cost the global food industry between A$40 to $50 billion every year, the scale of the problem becomes clear.
At the heart of the issue is the globalisation of food supply chains. Australia has benefitted more than many from the liberalisation of markets and access to consumers who are hungry for high-quality grains and proteins. But with the journey from paddock to plate longer than ever, our reputation as a clean, sustainable and safe food producer now mostly sits outside our control.
Take wheat for example. In the the journey from a kernal in Western Australia to a loaf of bread in Egypt, there are approximately 200 individual interventions by a variety of different parties. Each of these represent an opportunity for substitution, addition, and tampering. Or perhaps beef - is it blind trust that lets us believe that an ‘Australian’ steak on the menu in London, Paris or Rome is indeed Australian? If something went wrong, it stands to reason that our cherished ‘made in Australia’ brand would be tarnished.
Australians are unique in their apathy to this issue. Globally, there is a widespread lack of trust in food. It’s estimated that there are around 40,000 ‘daigou’ in Australia making anywhere from $40,000 to $100,000 every year buying vitamins and dairy products and shipping them to China. As has been rightly pointed out, it’s the first time that a market has found us before we found it. Daigou sellers have created an industry around giving certainty to the supply chain - in short, they are selling trust.
When we hear announcements of new and expanded trade deals with greater access to export markets, we should should temper our excitement about such announcements, taking into account our dependency on the integrity of others when Australian products leave our shores.
Fortunately, we now have the means to address the dangers of globalised food chains, if not the will. The frontier of technological possibility has taken us to a place where transparency, visibility and confidence are no longer pipe dreams.
Australia has a proud history of innovation and adaption. We also have a proud history of economic prosperity; indeed we hold the world-record for the country with the longest economic expansion in history.
In order to secure our prosperity for the next 26 years, we will need to take steps to fortify the integrity of our most important industries. Our government, regulators, retailers, and producers all have a role to play. With will and ambition, we can make it happen.
Not all nations have the same level of food trust and assumed food security as we do in Australia.
There are still question marks over the safety of food in Australia, despite our high level of trust.
Agribusiness Leader, PwC Australia
Tel: +61 (2) 8266 1458
Partner, PwC Australia
Tel: +61 2 8266 0141