Australia could boost farm output, risk from mining

Wed Jul 20, 2011 3:46am EDT

* Technology may help lift Australia farm output 70 pct by 2050

* Competition with mining an issue

* Genetically modified crops likely to increase

By Bruce Hextall

SYDNEY, July 20 (Reuters) - Australian farmers could lift output 70 percent by 2050 using new technologies including genetically modified (GM) crops, officials told a farming conference on Wednesday, though increasing pressure on land from mining stands in the way.

Australia is the world's fourth-largest wheat exporter, second-largest beef exporter and third-largest cotton and sugar shipper. New South Wales state is a top grain and cotton producer.

"The real issue that Australia has to deal with is that state governments are more focused on the mining industry than agriculture," said Mick Keogh, executive director of the Australian Farm Institute.

"That's a short-term gain instead of solving the issue of food security which is necessary for the long term," Keogh told the annual conference of the NSW Farmers' Association, a leading farmers organisation.

Australia's agricultural capacity is also attracting investment from countries such as China and Qatar, keen to tie up supplies in the interest of food security.

But farmers are concerned that some of Australia's most productive grain growing areas, including the north-west of New South Wales, are being swallowed up by companies wanting to access billions of tonnes of coal that lies below farmland.

Their major concern is that mining may adversely impact the quality of water aquifers.

The development of the coal seam gas industry where water, sand and chemicals are injected into wells under high pressure to release gas, is also a concern as farmers believe it will also hurt water quality.

"There is a real dearth of knowledge about our aquifers and the impact of mining -- there is a long way to go in getting the balance right," said Keogh.

The government's chief commodities forecaster, Australian Bureau of Agricultural and Resources Economics and Sciences (ABARES), says there is a strong case for more farmers to adopt innovative technologies.

"While Australian farmers are renowned for being innovative, those with a higher capacity for innovation are undertaking a greater number of innovative activities and are achieving higher productivity through the process," said Kim Ritman, ABARES acting deputy executive, said in statement.

Ritman's report noted innovative capacity was largely determined by a grower's characteristics, such as education, farm size, business acumen and financial resources, policies and investment decisions.

Paul Luxton, Australian general manager of crop protection company Syngenta , said there was still an opportunity to maximise farm production in Australia through technology.

"Australian farmers are quick to pick up new technology so they can grow more on less land," said Luxton.

"GM crops will be part of the new technologies that will boost production. It has also already proved extremely valuable in cotton and now we're seeing that too with canola," he said.

In January, 2011, the Australian government authorised the growing of GM canola, otherwise known as rapeseed, after trials were carried out. This year about 12 percent of a total area of 1.83 million hectares were planted with GM canola.

In 1996, insect resistant GM cotton was grown commercially for the first time in Australia after six years of field trials, saving farmers about A$50 million in insecticide costs.

Still, GM crops face health and safety concerns from a number of groups including Greenpeace.

Swiss-based Syngenta spent $7 million on research and development in Australia last year out of an annual budget of around $1 billion. (Editing by Ed Davies)