Northern 'food bowl' awaits investors

18 Jul 2012, 7:04 pm   -   Source: AAP
(AAP)

(AAP)

Northern Australia's potential as a major "food bowl" may depend on investment from China.

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Talk of Australia's far north becoming a new "food bowl" received backing from the top during Prime Minister Julia Gillard's visit to the Kimberley.

A National Food Plan green paper released this week says constraints including geographic isolation, rising costs and scarce labour and skills mean a big expansion of northern Australia's agriculture does not appear to be "sustainable or feasible".

But on the final leg of her three-day blitz in Western Australia, Ms Gillard told a gathering in Kununurra that the town had set an example to the region by embracing food production and diversifying its economy.

"Whether it's for mining, whether it's for tourism, whether it's the food industry, whether it's the very exotic and wonderful things that happen here ... your economy is supplying it and going from strength to strength," she said.

John Ship of The Institute of Public Affairs, a conservative think-tank, said the green paper released on Tuesday did not set out a clear strategy for the agricultural potential of northern Australia, where some areas receive almost double the annual rainfall of the Murray-Darling Basin.

"If Australia's agricultural sector is to make the most of these exciting opportunities, we need to overcome this ridiculous aversion to building new dams," Mr Ship said.

"North Australia has the opportunity to become a food bowl meeting booming demand for high-quality produce in China and the wider Asia-Pacific region."

WA Farmers president Dale Park said the potential of the Ord River region in the Kimberley had been known for many years.

"What is unknown is when we'll see the investment into the development of this region, to provide the necessary infrastructure to ensure its success," Mr Park said.

Chinese interest is said to be strong in buying land under the Stage 2 expansion of the Ord River Irrigation Scheme.

WA Opposition Leader Mark McGowan was sceptical, saying he'd heard only nominal amounts had been offered.

Ord River Stage 2 had cost the state government over $100 million more than originally planned, so land sale prices had to justify that investment.

Special Minister of State Gary Gray said the federal government embraced both the "food bowl" concept and Chinese investment in Australia.

Ms Gillard was asked whether she would happy if the second stage of the Ord River scheme was purchased entirely by Chinese investors, and replied that further opportunity in the region was desirable "but there's got to be all of the proper assessments".

"The stage that this is at, is that there is a negotiation about various proposals involving the state government and traditional owners, and that will take a number of months to come," she said.

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