We must encourage regional and rural living to house and feed our growing population

By Catherine Cashmore

Tuesday, 05 June 2012

This past week, another revolutionist was busy plotting the future of the human race and this time the savior of the world is going to be surrounded by concrete in the form of a vertical city.  The founder of TED, Chris Anderson, told a Sydney audience that the worlds 10 billion (which is expected to be achieved over the next 70 years – providing we don’t self-destruct, which I ponder is an ever present reality) can only be fed, sustained, and resourced, with urban living.  Chris’s view of urban living isn’t in the suburbia that fueled the old Australian Dream, providing a backyard to grow food and sustain a comparatively healthy lifestyle for the average family.  In Chris Anderson’s vision, children will be born and raised in vertical towers, the family car will become a bygone antique, and once habitable rural land will be allowed to regenerate into forests and wilderness.

While I admit to being a fan of TED and love a healthy exchange of ideas, Chris’s vision is frighteningly close to the reality of our inner-city municipalities. Especially when you consider Melbourne’s currently undergoing a massive growth spurt with high-rise CBD expansion set to grow from 180 hectares to 900 hectares in a bid to accommodate our unprecedented population growth. In his speech, Anderson did make comment advocating a standard of quality in his vertical vision.  He maintains that architects need to design towers where residents are not living in a rat trap or boxes jammed together.  However, in our modern, money-making, bang for buck economy, it’s doubtful whether any developer would put internal floor space above the potential of squashing as many on a block as possible while selling in bulk to the first foreign investor to register interest. It’s well accepted that our current high-rise craze is the bread and butter of the foreign investor market – most of which are sold off the plan with generous rental guarantees.

Anderson isn’t wrong in his assessment of urban growth, however.  Back in the 1800s just 3% of the world's population lived in urban areas. By 1900, the figure had swelled to almost 14%, with 12 of those cities numbering a population of 1 million or more. By the 1950s the numbers jumped again, with 30% of the world’s population choosing city living over a rural lifestyle – 83 cities had a population of 1 million or more. In 2008, for the first time in recorded history, half the world’s population was living in towns and cities. And by 2030 – assuming we’re not hit by a plague on the scale of Spanish flu, which wiped out 3% of the world’s population – the number living in towns and cities will swell to almost 5 billion – that’s 70% of the population.

This unprecedented growth in urbanisation is a powerful force.  The top 25 ‘mega-cities’ now account for over half the world’s wealth, 50% of which comes directly from within India and China – Australia’s largest migrant populations (which are incidentally now on the brink of outnumbering the European-born residents). However, while we’re busy urbanising the world and working out how to squash the average family into a vertical tower while still providing quality living, it might be worth while sparing a thought for who’s going to be farming the land to feed the world’s 10 billion?  Especially considering there are still in excess of 1 billion people suffering worldwide from hunger and according to thePopulation Reference Bureau, there are a further 8  billion mouths to feed each year.  Not to mention the robust level of population growth Australia is experiencing.

In a recent report led by land-use expert Trevor Budge at La Trobe and RMIT universities questioned if “Australia risked being profligate in wasting or taking out of production its best farmland.” Coal seam gas exploration knows no bounds in this regard – quickly eating into some of the richest agricultural land in NSW and Queensland.  As an excellentFour Corners documentary pointed out last year, Australian landowners are only considered owners of the top soil - not the mineral reserves below.  Therefore gaining planning permission to drill and prosper is seemingly no hard task. However, according United Nations' Food and Agriculture Organisation (FAO), over the past 33 years, our farmland has diminished by 16%.  It’s not due to building so much as the financial pressures on small farmers who can’t compete with the big players in the industry.  Much of the land has been reserved for conservation, some has been urbanised, however in short, it’s an industry that should be a thriving magnet for young Australians and yet for a number of reasons it’s dwindling . Consequently, intensive farming rules to the detriment of our smaller farmers who can’t compete with the large global companies who bid and buy prime Australian arable land.

As farming struggles, regional locations suffer the consequences.  According to the National Farmers Federation (NFF), Australia has more than 135,000 farms, which our inland regional towns and centres largely service. Not only are these regional towns the life and blood of our farming communities, they are areas of natural beauty preserving age-old traditions and providing an historical link to the roots of Australian culture.  While we’re busy building up our cities and taking advantage of the prosperity spanning from urban migration, there are some real challenges facing our primary farming communities. Low commodity prices, years of draught, foreign imports, increasing debt and the dominant duopoly of our major two supermarkets forcing prices down have caused many to sell up and move on.  Losing primary rural industries results in the devastating loss of smaller rural communities, and if we’re really to solve Australia’s population challenges this is exactly where we should be pouring funds rather than building more vertical towers.

Most city dwellers have their eyes firmly fixed on residential investment, the argument being that everyone needs shelter and we simply don’t have enough affordable accommodation to support the unprecedented level of urban growth our capital cities are attracting. This is true, however, land is about more than just shelter – it’s about food, biodiversity, productivity, and sustainability.  The answers to Australia’s population growth aren’t contained in the skies above – although vertical living is part of that plan. Rather the answers are to be found under the soles of our feet – in the abundance of land that surrounds us.

As our arable land diminishes, investment in farmland is promising large returns. Wheat prices have soared due to poor weather conditions in Russia and Ukraine.  According to the Australian Farm Institute, Australia is the second biggest wheat exporter – hence why we see so many international investors eyeballing our crops.  However, the profit taking is dominated by the bigger players and in the meantime small communities are missing out.  Victoria’s government have been harshly criticised for its plans to build over prime agricultural land in Werribee South and Casey, and the suburban sprawl is daily fodder for the passions of media journalism.

However, when you consider the challenges facing our increasing population, you’d be woefully shortsighted if you didn’t recognise the roll on effect assisting smaller land owners would present, in encouraging numbers to enter the industry and consequently reviving growth and business in dying regional communities.  Fostering an atmosphere where smaller farmers could compete without being swallowed up by larger companies (often part internationally owned) would be dependent on policy changes.  Areas not so centralised on capital locations should play a significant part in our grand plans for population accommodation.

Not everyone wants to be a city dweller.  A significant minority would happily relocate to regional centers if opportunity presented itself.  For example, a few weeks ago, in excess of 8,000 attended Melbourne’s Exhibition Centre for the inaugural Regional Victoria Living Expo. Following the expo, Peter Ryan, the Victorian Deputy Premier released evidence indicating 11% of Melbourne’s metropolitan residential population (around 450,000 people) are contemplating moving to regional Victoria in the next three years.  The challenge will be sourcing employment in the regional centers – the primary industries being agriculture and tourism.  The will is there if the chances arise.

Last week’s episode of Four Corners “Casualties of the Boom” uncovered similar sentiments.  The program focused on the small Queensland town of Moranbah, which is suffering a self-sacrificing demise as miners fly in and out without contributing to the greater community.  Although the majority of workers would choose to reside only temporarily, a significant minority would be happy to move their families and lives to the area permanently.  Unfortunately, the cost of housing and lack of essential facilities from smaller businesses, unable to compete with wages offered by the mining sector, prevent those willing from doing so. The key to solving this problem is closer work and communication from industry partners and local government with the community as a whole – ensuring dominance doesn’t always mean demise.

As it stands at present, demand for agricultural university graduates is double current supply and enrolments are diminishing. According to La Trobe University, over the past decade, the number of university campuses offering agricultural courses in Australia has fallen by more than half – down from 23 to nine. Yet, Australian farms have grown into a $40 billion industry, with just over half our land mass devoted to agriculture.  Mining will adequately fuel Australia’s growth for the foreseeable future, but agriculture will be one of the prime industries we’re left with. Therefore, we need to make moves now to ensure opportunity in this sector serves Australia and her citizens – and more importantly, use the wealth to benefit and increase the feasibility of living in regional centers. It will take more than the NBN – we need to empower local communities to enable them to take control of local development.

Meanwhile global demand in our farmland is growing. TIAA-CREF, a leading US financial services provider, has recently raised $2 billion in commitments to invest in farmland in the United States, Australia and Brazil. On its website it states: “Farmland presents a risk-return profile that meets our depositors’ objectives and that offers portfolio diversification.” Other big investors allocating money into farmland assets include Jim Rogers, the chairman of Rogers Holdings and Beeland Interests, Inc. who has recently established an Australian farmland investment fund – boldly announcing that we’re in the middle of an agricultural “super cycle”. China is pushing for less scrutiny in its Australian farmland acquisitions and according to one report, even theKiwis can purchase Aussie farmland cheaper than Australian investors.  The ABS have foreign investment in Australian farmland at 11% – under current policy, this will no doubt increase.  Our own farmers simply can’t compete.

Of course, reviving regional localities is not just about agricultural investment – it’s part of a much broader plan.  Alignment of state and regional responsibilities, greater attention on transport and telecommunication, establishing strong connections between smaller and larger neighborhoods to enable the support and development of high performance industries, which will in turn attract a younger work force, are essential.   Let’s start developing our country for people and community rather than selling it off to big profiteers who have a vested interests elsewhere.  We are the lucky country by world standards, but complacency should never be allowed to dominate. Vertical living may suit some, however we need a better plan for all.  Part of that plan should be dramatically speeding up the regional agenda and this requires a much larger investment in Australia’s agricultural industry by way of education, along with immediate policy changes to level the playing field so smaller farmers are able to compete once again.

Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.