SYDNEY, Feb. 7 (Xinhua) -- With Australian agriculture providing a massive benefit to the national economy, experts have suggested more capital needs to be sourced to increase the production of farms in Australia and meet the demands of their largest market, China.
In September, CPA Australia chief executive Alex Malley said foreign investment in Australian farmland has always been an important part of Australia's prosperity, but more needs to be done.
"To double the real value of annual agricultural exports by 2050, it's estimated Australia will require around $400 billion to fund farm consolidation and changes in farm ownership and an additional $600 billion to lift farm productivity" Malley said.
Hannah Bretherton, a researcher at China Matters, told Xinhua on Tuesday, that innovation is crucial to Australia's success, and there have been some farmers who have managed to do just that, particularly in the wool sector.
"China buys 80 percent of Australian wool exports, and Australian wool exporters are innovating to meet the growing needs of the Chinese consumer," Bretherton said.
"We are developing high-quality products that are on the top of the shopping list for Chinese consumers, such as breathable sportswear and lightweight outdoor wear,"
"Previously we had a raw-resources, bulk-export mentality but there are Australian businesses switched-on to China's changing demands and tapping into our capacity to provide them with what they are looking for."
But with only 3 percent of China's total investment in Australia flowing to agribusiness, Bretherton stresses that Australia needs to acquire more capital if it is going to reach its potential within the sector.
"There are many innovative, renewable technologies being introduced into the agribusiness sector and Australia needs the capital to develop this further," Bretherton said.
"We know the demand is there on the Chinese side; in 2015 China became the largest source of foreign investment in agriculture, despite it being so low compared with other sectors,"
"I think the figures for 2016 will continue to illustrate the things the Chinese consumer is now looking for: high-quality food and lifestyle products that are environmentally sustainable."
Current restrictions on investment make it difficult for farmers to improve their practices and technology, but Bretherton says the answer can be found by loosening government regulations.
"Australia is the fourth most restrictive place to invest in agri-business out of the 35 OECD countries. The government need to tweak its investment thresholds, they have obviously become more difficult for certain countries, including China," Bretherton said.
"I do think we need to look at the restrictiveness of our investment regulation."