by Professor Ross Kingwell, AEGIC Chief Economist
In a wealthy nation like Australia, it’s easy to lose sight of the crucial importance of the cost of food, including the cost of bread and cereals, in nearby nations.
Australia’s national anthem says it all: Our land abounds in nature’s gifts of beauty rich and rare.
For decades we’ve been selling off our mineral wealth; coal, iron ore, nickel, zinc and gold to name a few. Lands have been cleared; crops planted, sheep and cattle introduced, and agricultural wealth generated. People with skill and opportunity have flocked to Australia and helped develop a rich, diverse economy.
Such is the wealth of Australia that people’s expenditure on food is only 4.5 per cent of the nation’s GDP; and their expenditure on bread and cereals is only 0.7 per cent of GDP (Figure 1). A similar story applies to other wealthy nations like the USA and Canada.
Yet there are countries on Australia’s doorstep, like Cambodia, Myanmar, and the Philippines where expenditure on food is close to or higher than 30 per cent of their nations’ GDPs and expenditure on bread and cereals still accounts for around 10 per cent of their GDPs. For many South East Asian nations that Australia supplies grains to, the cost of food and the cost of bread and cereals remain major components of those countries’ GDP. Moreover, in some South East Asian countries, under-nutrition and malnourishment remain problems in some portions of their populations.
Figure 1: Consumers’ expenditure on food, bread and cereals, as a share of GDP, in key countries. Based on ICP datasets for 2017.
Affordable, available food is often a given in much of Australia. Yet for Australia’s near neighbours having access to nutritious affordable food, including bread and cereals, remains an important challenge.
In Australia, it’s easy to lose sight of that when living amid such wealth, surrounded by bountiful, affordable supplies of diverse foods.
Expert grains industry analysis and commentary from AEGIC’s Economics and Market Insight Team on a range of big-picture topics that affect Australia’s export grains sector.