Global Issues Paddock Action. Proceedings of the 14th Australian Agronomy Conference. September 2008, Adelaide South Australia. © Australian Society of Agronomy www.agronomy.org.au. Edited by MJ Unkovich. Emerging Opportunities for Australian Agriculture? B.A. Keating and P.S. Carberry Agricultural Sustainability Initiative, CSIRO Sustainable Ecosystems Abstract Agriculture globally and in Australia is at a critical juncture in its history with the current changes to input costs, commodity prices, consumption patterns and food stocks. Constraints are emerging in terms of land and water resources as well as imperatives to reduce greenhouse gas emissions in the face of a carbon- constrained world. There is evidence that rates of increase in agricultural productivity are slowing, both in Australia and overseas. On top of all these drivers of change, agriculture is the sector probably most exposed to climate change, and Australian agriculture is as exposed as any in the world. Against this turbulent background, we review the emerging opportunities (and threats) for Australian agriculture. We consider topical opportunities associated with new products or services from agriculture, namely biofuels, forest-based carbon storage in agricultural landscapes, bio-sequestration of carbon in agricultural soils, and environmental stewardship schemes that would reward farmers for nature conservation and related non-production services from farming land. While there are situations where all these emerging opportunities will have a place and will deliver benefits to both farmers and the wider community, our overall conclusion is that none of these, on their own, will transform the nature of Australian agriculture. Instead, we argue that the greatest “emerging opportunity” for Australian agriculture is to achieve productivity breakthroughs in the face of current and emerging constraints. We have formed this view by looking through the lens of the global food production challenge which sees the need for a doubling of food production by 2050 in the face of increasingly constrained land and water resources, soil degradation, increasing energy scarcity and limits on greenhouse gas release to the atmosphere. These same land, water, soil, energy and atmospheric constraints to agriculture apply in Australia and will shape both farming and the agricultural R&D agenda over coming decades. In the face of such national and global agronomic challenges, we conclude by highlighting the skills challenges facing agricultural science in Australia – the demand for the integrative skills of agronomy appears strong but the sector has suffered from disinvestment in recent decades. Introduction We “agronomists” live in interesting times. Can anyone remember a time when global agriculture has experienced such a rapid rate of change and was faced with so many imponderables, “wicked” problems and perhaps opportunities? The global food security situation has captured the attention of politicians and public alike. Equally importantly, agriculture has to quickly adapt to the fact that it is operating in a carbon- constrained world. The challenges (and opportunities) facing Australian agriculture in 2008 reflect both of these global drivers as well as forces more specific to Australia. We are seeing unparalleled shifts in global food markets – in terms of changes in demand for protein foods, low levels of global food stocks, increasing food prices and social/political unrest in some regions arising from these developments. We are also witnessing very significant shifts in the markets for agricultural inputs. Energy costs have risen more than 3-fold, and fertiliser and agro-chemical costs have increased more than 2-fold. In parts of Australia, prices paid for irrigation water are 5 to 10 fold higher than historical levels. For the first time, we are seeing a major diversion of food into non-food markets associated with biofuel production in Europe, USA and Brazil. Moreover, there is an unprecedented demand (or prospects) for non-food production products or services from agricultural land – be it in carbon storage, fresh water yield, biodiversity conservation or some other land values associated with landscape amenity and human settlement. These developments are all occurring against a backdrop of massive environmental change, in both the climate and atmosphere as well as soil and landscape assets. Finally, in addition to this change, we may be starting to see a “plateau” develop in rates of increase in agricultural productivity.