Evaluation of the potential to expand horticultural industries in Northern Australia

This project developed an industry research framework to evaluate the potential to expand horticultural industries in northern Australia. In discussion with the project partners, three major research themes – supply intelligence, market intelligence and supply chain intelligence – were identified as key priorities for action. The analytical results of the project were expected to provide an evidence-base to support decision-making in regional and market investment. Focal industries: Three horticultural industries: one newer industry – lychees, and two established industries – mangoes and avocados across north QLD, NT and WA were selected based on industry characteristics and inputs from regional industry partners. To capture the potential for exporting mangoes, avocados and lychees from northern Australia into Asian markets, five markets were focused on in this project. This includes Hong Kong and Singapore which are open markets and China, Japan and South Korea which are protocol markets. Australian mangoes, avocados and lychees have established their market position in Hong Kong and Singapore, which are regarded as marginal markets. However, continuous efforts are required to maintain market competitiveness and expand market share by offering quality products through innovative value chain configurations. In contrast, China, Japan and South Korea are regarded as high-margin markets where Australian avocados and lychees (mangoes excluded) have not yet gained full market access. Main recommendations: One of the key findings is that the voice of the consumer in the Asian markets analysed is not being heard by most growers. Most smaller growers do not have the resources and are not integrated into a supply chain sufficiently to have the awareness or understanding of consumer needs and behaviour in key Asian regional and city markets. What has been suggested is a stronger long-term solution, supported and enabled by new governance structures and technology. 1.To mimic the digital and data platforms that have been developed and are in place for and by the lead growers and exporters over the last ten years, to establish a digital market and supply chain intelligence platform that is accessible to small and medium growers. The focus then is to digitally transform and strengthen existing supply chain governance and collaboration arrangements across the three industries with respect to northern Australia (or nationally). The governance arrangements should necessarily involve all the key parties, requiring strong industry leadership with government agency support. This shared collaboration model would spread benefits further across the industry, reducing barriers to market entry and penetration. Increasing the responsiveness of the entire industry to rapidly changing needs and behaviours of consumers in markets has the potential to be much more lucrative than what is currently being accessed for all supply chain participants. 2.To support the first goal, it’s recommended the establishment of an Export Development Decision Support System (EDDSS) that will enable a large number of supply chain participants from across the producing regions and international markets to extensively interact while capturing increasingly current data on transactions and activities at each stage of the movement of goods, and associated actions and outcomes across the entire export-import process. The upstream voice of both growers and exporters and the downstream voices of importers and consumers in international markets can become a key element of holistic export development strategies. Specifically, the development of an upstream participatory decision support system which makes full use of the transactional and trade data of the EDDSS will improve the decision-making capability of growers and exporters, improving export development and regional export strategies. The development of a downstream participatory decision support system with the involvement of importers and retailers will increase the capacity to promote the benefits and value of northern Australia’s mangoes, avocados and lychees in large and expanding city and regional level markets. The enhanced data capture, curation, analysis and dissemination is focussed on increasing international market access, and increased market development through improved margins for all supply chain participants. 3.Within the Export Development Decision Support System, establish a digital export and knowledge hub that the blockchain technology and systems can feed into, that systematically builds the high-quality information base needed for growers to make better decisions about their product, about markets and also where and how much they can innovate. Successful larger growers and exporters have had similar systems in place. Smaller growers have not had the margins to invest in such sophisticated systems until now. The reality, however, is that with minimal industry investment, coupled with investment support for lead agencies such as Hort Innovation and each of the three State and Territory Governments, small and medium growers can begin to gain the advantages that, until now, have only been afforded to larger growers and exporters. This pooled approach is one of the only ways that a boost in competitiveness in the targeted export strategy can realistically achieved. What is proposed is a program of work over a number of years that builds direct real-time data on products out of northern Australia, including following and sustaining its provenance through to the consumer, as well as a direct communication channel from the consumer to growers so that improvements can be made to both the supply and demand side of the equation simultaneously. This mechanism will also increase supply chain transparency and the visibility of product movement along the supply chain through to consumers. By opening two-way communication, the hub will enable more rapid value creation at the grower end, value delivery along the supply chain, and value capture by all supply chain participants. 4.A cross-border collaborative research and development framework should be established to increase collaboration between those in industry, research and consumer market settings to improve the planning around R&D priorities. New product development utilising emerging genetic technologies is increasingly key to market competitiveness for horticultural products. Breeding and development of new plant varieties through embracing innovation in breeding targets, technology and propagation techniques could increase speed to market of new varieties and the development of products that will find a high-value market due to their attractiveness to consumers. There are excellent examples of this happening already for the large growers; however, these are only examples and are not indicative of behaviours and practices across these industries and other horticultural industries. The major finding found in this particular study is for horticultural growers to use the enabling technologies that other industries have been using for considerable time and which larger growers have been using for at least ten years in the mango and avocado industries. The upside of this approach is that most technology that will need to be adopted is already proven, so are not new to the industry, it is only new to the grower.