Northern Australia sits at the end of extended food supply chains of 3,000 to 4,000 kilometres in length. This feature has long been identified as a point of vulnerability for populations in the north of the country. These conduits have been and continue to be exposed to climatic and energy shocks. Even though the north of Australia has substantial fresh food production capabilities in both livestock and horticulture, the production regions are highly dispersed and there’s limited food processing. Most of Australia’s food processing is done in southern regions. This article proposes a case for positioning food-processing investments in northern Australia closer to sources of produce supply and northern population centres. It also introduces a project dedicated to investigating this possibility.

Australia’s supply chains have long been precarious. We are a distant island in a hyperconnected global economy. Despite being a net food exporter, Australia’s international and domestic food supply chains have come under considerable pressure, from pandemic, climate and energy shocks¾ and, given current global uncertainties, there could be worse to come. The historical resilience of Australia’s food production and distribution system has led to some level of national complacency about food security.

However, over the past three years, various unrelated events have pushed global supply chains and the contemporary economic system to their limits, and proven that our complacency needs to change. Covid-19 saw just-in-time food supply chains falter. In addition, increased competition between China and the US has had many trade consequences for Australia. Centralisation of production and offshoring have left supplies of essential commodities like urea and phosphates at the mercy of our trading partner’s domestic policy decisions. The war in Ukraine continues to disrupt supply chains, with cascading changes in export controls for food in many countries and instigating a global energy shock. It’s little wonder that discussion of secure, sovereign and resilient supply chains has increased. None of these supply chains is more important than food.

The northern Australia food technology innovation project is investigating advances in food processing and the value-adding of agricultural produce in northern Australia. Funded by the Department of Education, Skills and Employment, and hosted with Charles Darwin University, it is focused on shelf-stable food production using novel food-processing technologies that can deliver superior food sensory and quality outcomes. The core aim is to drive growth and generate employment by establishing regional food-processing capability in the north, with a particular focus on the Northern Territory and northwestern Western Australia. The project will investigate the strategic, business and technological aspects of a regional food-processing facility. It represents a first step in building regional and national capability in shelf-stable food production in the north of Australia.

Having regionalised processing capability (especially in the shelf-stable lines) would enable product differentiation and additional market opportunities that could contribute to increased overall industry resilience, especially if there are radical and sudden changes to market conditions for core northern-sourced agri-food commodities. Such a development has the prospect of putting a floor in the market for animal and plant production sectors in the NT and Ord River region of WA, especially for out-of-specification or sub-premium produce. Such produce, while still of satisfactory quality, ends up heavily discounted or wasted.

A shelf-stable food-processing capability is deemed a critical next step by both the livestock and plant industry sectors in generating growth in industry value and employment. To be successful, northern Australian food manufacturing will require scalable, automated and digitised manufacturers and service industries operated by a highly skilled professional workforce. It must be focused on productivity gains and be competitive in the global marketplace. Demand for shelf-stable and long-life foods in developed economies is increasing. Improvements in food technology and concerns about food security likely underpin this shift.

A local food-processing sector can increase regional economic opportunities and jobs by creating new products, services and markets. Regionalised food processing is an economic multiplier. Remote regions can and have benefited from these types of investments in Australia. The vegetable processing being done in northern Tasmania and at SPC Ardmona’s Shepparton plant in Victoria showcase the wealth generation and employment growth that food processing can deliver to regional economies.

Red meat is an obvious candidate for such a facility. The north of Australia produces cattle in volume. Paradoxically, Australia isn’t a large domestic producer of shelf-stable processed meat products. Here lies an opportunity not only for import substitution, but also for new and improved products using novel technologies that can deliver superior nutrition and taste.

There’s also a strategic capability angle related to this topic. Most of the Australian Defence Force’s combat ration supply is centred in New Zealand, which presents a number of sovereign risks. The northern Australia food technology innovation project’s efforts could add to the case for bringing military rations manufacturing capability back to Australia, and importantly to have a hub of such capability in the north of the country. This offers the advantage of greatly reduced lines of supply to forces in northern Australia and in Southeast Asia, for example.

A sovereign and resilient food supply chain won’t just happen. Many nations are now trying to mitigate the risk of food supply-chain shocks by restricting exports. In contrast, a forward-leaning Australia focused on shelf-stable food production could provide increased global food security—especially with meat products from the northern cattle herd. This change will require the right Australian government policy settings, as well as co-investment with agribusiness and food industry partners to initially pilot, road-test and implement.

Australia, through its diverse communities, expansive geography and entrepreneurial spirit, maintains deep, yet often not well understood, regional connections beyond its borders.

If we are to build on these connections, then Australia’s Department of Foreign Affairs and Trade officers working on Pacific issues need to get out of Canberra.

This may seem nonsensical. Of course, DFAT is out of Canberra! Not only does it have domestic offices in each state and territory capital, DFAT has locations all over the world, representing Australia from 120 diplomatic posts across the globe.

What’s needed is DFAT, specifically, its Office of the Pacific, in northern Australia.

It sounds silly at first—why would we focus our international diplomatic efforts in our own country? But the answer is quite simple. Australia’s northern regions are the doorway to the Indo-Pacific. Profoundly deep ties across history, migration, trade, language and culture already exist between northern Australia and our closest Pacific neighbours. Flying ministers from their offices in big cities in the south of Australia directly to the capital cities of Pacific island states misses the people-to-people connections that have been maintained for generations.

Australian diplomatic engagement with the Pacific has reached new heights as Prime Minister Anthony Albanese’s government has supercharged a trending pivot echoed in the United States and beyond. Foreign Minister Penny Wong’s visits to the region have gone a long way to reset relationships that the former government had prioritised in rhetoric but neglected in practice at the higher levels of government.

In 2019, DFAT established the Office of the Pacific ‘to support Australia’s deepening engagement with the Pacific, to enhance whole-of-government coordination and to drive implementation of our regional activities, consistent with the priorities of Pacific countries’.

To properly fulfil this mission, the Office of the Pacific should establish a presence in northern Australia.

Pacific diasporas in northern Australia are well established and they preserve and share language, knowledge and culture. There is a large, active Portuguese Timorese community in Darwin and strong Papua New Guinea and Solomon Islands connections in Cairns and Townsville. Existing and potential trade links, especially between Far North Queensland and the Pacific island nations, attest to the multidimensional nature of the relationship between northern Australia and our wider region. However, no mention of trade between these areas can ignore the history of blackbirding, which rightfully casts a shadow over the relationship.

The established trade and investment connections between Far North Queensland, especially Cairns, and the Pacific are complemented by localised business and financial links. The significant remittance flows from overseas workers form a significant proportion of GDP for Pacific nations, up to 39% in the case of Tonga in 2020. Writing about the future of the government’s Pacific step-up, academic Tess Newton-Cain notes, ‘Among the Australian states, Queensland is the one best placed to take the lead on expanding and deepening links with Pacific island countries.’

These areas enjoy mature direct relationships that don’t fit neatly in the federal or state government levels but must be recognised and appreciated as a less formal but often more persistent, accessible and genuine form of diplomacy and international relations.

Take, for example, the Townsville Peace Agreement, signed in November 2000 between the Malaita Eagle Force, the Isatabu Freedom Movement, the provincial governments of Malaita and Guadalcanal, and the Solomons national government, which successfully eased tensions following a coup in June that year. The role of northern Queensland in this significant diplomatic event shouldn’t be understated; it’s still an active topic in Solomon Islands domestic politics and a symbol of northern Australia’s consequential position in the region.

There’s also an opportunity here for DFAT and the Office of the Pacific to show a real commitment to the department’s Indigenous diplomacy agenda. Australia’s highest concentrations of First Nations people are in the Northern Territory and across the rest of northern Australia. The link between the Torres Strait Islands and Papua New Guinea is longstanding, deep, rich and internationally recognised as a special relationship between Indigenous peoples, beyond contemporary concepts of statehood. The engagement of DFAT with the diverse communities in Australia matters just as much as its engagement with diverse communities internationally. This is true not only because DFAT should have an understanding of the Australians it represents, but also because much of what DFAT aims to achieve is already occurring in places it might not have thought to look.

As the government’s defence strategic review progresses and we to try gain sharper clarity about our place in the region, we are reminded that even as globalised and tech-enabled as we are, geography and physical space matter. The north has too long been considered as the edge of Australia by policymakers in Canberra; it’s time for it to be viewed instead as the door to the region and the globe.

A series of global and national events over the past six months, among them Russia’s invasion of Ukraine, the emergence of foot-and-mouth disease and lumpy-skin disease in Indonesia, flood- and Covid-19-affected food supply chains, a bee-killing varroa mite invasion on Australian shores and increasing cost-of-living pressures have all combined to place food security and the role it plays in maintaining stability at the forefront of everyday consciousness.

These factors speak to the critical but often underappreciated role of agriculture in human prosperity and geopolitics. From the rise of agriculture-enabled human settlement some 12,000 years ago to today’s complex global economy, agricultural production has served as a constant, often decisive, feature in human affairs.

As governments and people everywhere seek to grapple with a range of pressures exerting themselves on global and local food systems, for Australia agricultural production presents strategic opportunities just as much as it challenges the rules-based order we seek to preserve. Perhaps nowhere in Australia is the intersection of strategic and agricultural priorities and opportunities more pronounced than across the north.

In Deep roots, an ASPI report released today, I examine the role that primary production can play in realising northern Australia’s strategic potential. The report outlines the strategic importance of agricultural production in northern Australia as a key security-enabling sector with the capacity to enhance social cohesion and prosperity at home and engage with the world to advance Australia’s strategic interests, but only if the policy settings are right.

Together with recent events, a few unfolding historical processes position northern Australia’s agricultural industries, and the people, communities and governments that support them, as powerful instruments for advancing prosperity and national security. Geopolitical factors like intensifying great-power competition and territorial disputes in the Indo-Pacific, increasing personal wealth in Southeast Asia and the impacts of climate change on small island states mean that Australia’s northern approaches occupy a critical space in one of the most strategically consequential regions in the world.

At the same time, scientific, technological and workforce advances in northern Australian agriculture have allowed for the sector’s development, fuelling economic growth, including through exports. The fact that some of these agricultural outcomes have arisen as a result of government investment aimed at developing the north for strategic ends highlights a prevailing awareness among policymakers of the critical link between the region’s prosperity and its security.

However, efforts to engage northern Australia’s agricultural sector in advancing strategic policy must be bolstered if the confluence of opportunities that currently present themselves are to be exploited to their fullest potential.

This agricultural and geopolitical positioning also comes at a time of significant domestic political change. Australia’s recently elected prime minister, Anthony Albanese, has frequently expressed his desire to harness the potential of infrastructure development and manufacturing to advance economic and social outcomes. As Deep roots explores in detail, infrastructure investment is a vital tool for both unlocking agricultural possibilities and improving Defence’s capacity to operate effectively across northern Australia, where transport infrastructure options are limited in comparison with the situation that prevails in southern Australia.

The federal government’s commitment to enhance engagement with First Nations peoples, including through a voice to parliament, will require particular attention to be paid to northern Australia. Here, greater appreciation for the deep and ancient connection between Indigenous Australians and country, their land and waters, can inform policy that improves biosecurity, enables food and fibre production, and enhances environmental stewardship. Deep roots outlines options for policymakers to further engage First Nations peoples, particularly through greater investment in initiatives like the Indigenous Ranger Program and support for agricultural entrepreneurship.

But realising the strategic potential of the agricultural sector in northern Australian is not without its risks. The report identifies significant challenges related to social cohesion, infrastructure investment, rural political discontent, environmental policy, service delivery, biophysical constraints, and biosecurity threats, all of which pose barriers. Federal, state and territory governments need to examine the underlying forces that give rise to these strategy-limiting risks, among them a feeling of abandonment connected to an expanding urban–rural divide, infrastructural deficits that stifle agricultural development, and policymaking that lacks full appreciation of the realities of growing food and fibre in the north’s unique conditions.

Central to overcoming these barriers and harnessing the power of agriculture to propel northern Australia’s strategic importance is the primary producer. The notion of a smallholder farmer on a small block of land doesn’t accurately portray the picture of food and fibre production across much of Australia. While the family farm is certainly an important element, in Australian agricultural businesses the farmer or pastoralist operates an often complex and large enterprise.

Farm owners and managers must frequently employ sophisticated business planning and operations that extend beyond the farmgate, engaging in infrastructure development, research, agricultural extension and education, export market growth, technology development, environmental stewardship, government policy and community initiatives. These activities, while ultimately connected to the farm business, nevertheless speak to the capacity of producers to connect with external stakeholders. This capacity can be leveraged to create alignment between the strategic ambitions of governments and the production aspirations of farmers.

To that end, and in light of a range of social, environmental, cultural, economic and strategic considerations, Deep roots recommends four steps that governments should take, together with communities, businesses and other organisations, to grasp the strategic opportunities that northern Australia’s agricultural sector offers at this critical point in our country’s history.

First, policymakers need to foster and promote a unified message to increase awareness of the strategic role of the northern agricultural sector, with particular emphasis on working with primary producers to convey ownership of shared strategic aspirations.

Second, governments should provide greater investment in agricultural research to grow and protect agricultural industries, born of a realisation that prosperity is key to security but impossible without adequate resourcing of human capital.

Third, policymakers, together with businesses and industry groups, should bolster their efforts to engage and collaborate with Indigenous communities in northern Australia, particularly in advancing prosperity through agricultural and environmental initiatives. Central to this is an authentic appreciation of and respect for Indigenous knowledge and connection to country.

And finally, the report recommends the implementation of a cohesive nation-building plan that employs both grassroots and big-picture thinking to connect the north’s diverse strengths, taking full advantage of the region’s culture of multi-stakeholder collaboration for infrastructure development.

Northern Australia is becoming increasingly important to the United States and its Indo-Pacific presence. What is less clear for industry, community and state and territory stakeholders is what US–Australia defence cooperation looks like in northern Australia for the next decade. There’s plenty of rhetoric in agreements such as the US force posture initiatives, AUKUS and the Quad. However, their lack of clarity and specificity inhibits whole-of-government cooperation, coordination and synchronisation in northern Australia.

The US government has been in northern Australia for decades. The Joint Defence Facility Pine Gap in the Northern Territory and the Naval Communications Station Harold E. Holt in Western Australia have long stood as the public face of the US commitments to Australia. No doubt, both facilities remain essential to the US Department of Defense. But they also serve, at least to some extent, as relics of the Cold War when Australia was, for the most part, a strategic backwater.

The force posture initiatives in northern Australia are now more than a decade old. The Marine Rotational Force—Darwin and the enhanced air cooperation initiative are an extension of Australia’s defence alliance with the US. The two nations developed these initiatives in a very different strategic context from the one we face today. Interestingly, despite strong support on both sides, it took almost a decade before the US rotational force deployed at full strength.

The Australian side argues that this slow maturation was because of limited US troop availability. It’s also argued that the limited economic capacity and infrastructure available in northern Australia hampered the expansion of the force, a perspective that is unreservedly rejected by local, state and territory governments.

The Pentagon, for its part, argues that Australia’s Defence Department dragged its feet on implementation.

Regardless, it seems clear that 10 years is a long time.

Today, Australia is key terrain in the Indo-Pacific. The defence strategic update of 2020 said that, with less than 10 years of warning of any significant future conflict, time was no longer on our side. With this paradigm shift, we must now consider force posture and logistic preparedness in far more detail than at any other time since World War II.

Since the strategic update was released, Australia has entered into the AUKUS security pact with the US and UK. The agreement covers advanced cyber, artificial intelligence, autonomous systems, quantum technologies, undersea capabilities, hypersonics and counter-hypersonics, electronic warfare, innovation and information sharing. There ought to be little doubt that this pact will shape US, UK and Australian military cooperation for decades. But to what extent is difficult to predict, given the immediacy of its key areas of focus: nuclear submarines, cyber and hypersonics.

At some stage, the Quadrilateral Security Dialogue between Australia, Japan, India and the US will likely see greater military cooperation. One only needs to look at a map of the Quad nations to see the centrality of northern Australia. However, it does seem that tangible cooperation among the four countries in northern Australia is a long way off.

In the meantime, the Australian defence organisation is investing heavily in its northern estate. Substantial investments in updates to and modernisation of its major training areas continue apace. Garrisons and airbases are receiving equally significant investments that reflect the strategic update’s northern focus. There is a commitment to continue this level of investment until the end of the decade.

Progress, however, is being hampered by the impacts of economic and human resource considerations and the absence of a strategic policy to drive decisions in the region. Australia’s armed services still struggle to attract members willing to be posted to northern Australia, or at least they believe this is the case. Similarly, they regularly mention the costs associated with developing their northern infrastructure. At the centre, though, is a belief within Defence that dispersal and depth are more important than physical presence or investment in northern Australia.

In contrast, US commanders want to be in northern Australia. But they also often lament the expeditionary mindset they must adopt when deploying to northern Australia for exercises. US logisticians remain concerned about the capacity of existing infrastructure and supply chains in these locations. Their experience has been that major exercises like Pitch Black and Talisman Sabre require two years of careful planning to succeed.

Of course, there’s some argument that the defence organisation would be able to mobilise more significant support in the case of a major conflict. However, that assumption remains untested. Such thinking doesn’t ensure that much-needed multi-user infrastructure, including ports, airfields, roads and rail, are in place if and when conflict arises.

Rightfully so, any foreign military presence in northern Australia must be in the national interest and respect Australia’s sovereignty.

A year ago, it seemed that US defence thinking, especially at Indo-Pacific Command in Hawaii, was focused on the possibility of forward-deploying additional capability in northern Australia. But that thinking has rapidly evolved over the past year and is now much more about creating ‘theatre gateways’ and joint logistics capabilities. In US military doctrine, theatre gateways are the entry and exit points that all personnel must pass through before moving on to their respective areas of operation. Upon arrival at a theatre gateway, troops commence joint reception, staging, onward movement and integration. Theatre gateways also serve as logistics hubs.

To realise US theatre gateway plans will require significant infrastructure in locations like Darwin and Townsville and the securing of all-season supply chains. Much of that is not in place or planned for on the Australian side.

Projects like the construction of a $270-million fuel-storage facility in Darwin to support US defence operations in the region and investment in Royal Australian Air Force Base Tindal align with the theatre gateway approach. Nevertheless, neither the Pentagon nor the Australian defence organisation wants to foot the whole bill for ensuring the preparedness of northern Australia.

It seems likely that the Australian defence organisation will once again seek to slow any US progress, if for no other reason than to ensure its thinking can keep pace with that of its US ally. The central argument here is likely to be that local economies won’t be able to keep pace with the demand for construction, food and accommodation, to name a few factors.

The Albanese government’s promised force posture review could play an essential role in providing clarity of thought and strategy. It should give a clearer perspective on what must be done in northern Australia. However, a broader whole-of-government perspective is required if we are to answer how the ‘what’ is to be delivered. If Australia is to get its policy settings right in the north, it will need to think much bigger and faster when it comes to preparedness than it has done since World War II.

Last week, ASPI researcher Albert Zhang shone a spotlight on a sophisticated Chinese Communist Party information campaign targeting rare earths and Australian company Lynas. This research has powerful implications for those policymakers seeking to create resilient supplies of rare-earth elements (REEs) and critical minerals.

REEs are a group of 17 metals—15 elements from the lanthanide series and two chemically similar elements, scandium and yttrium. Each has unique properties vital for a range of commercial and defence technologies, including batteries, high-powered magnets and electronic equipment. An iPhone, for example, contains eight rare-earth minerals, and there are probably a couple in your refrigerator and washing machine. They also make up about 420 kilograms of an F-35 fighter jet and are essential for guided missiles.

Despite their name, REEs are not all that rare. They’re present in abundance in the earth’s crust. The challenge, however, is finding them in sufficient concentrations to justify commercial mining operations. Securing the upfront financing required to build a mine in a location that will tolerate the substantial environmental impacts of rare-earth processing is no easy task.

Fortunately for China, the commercial viability of its reserves, Chinese companies’ access to state-backed financing and the country’s lax environmental regulations have helped build its dominance of the global REE market.

China’s rare-earth production exceeds that of the world’s second-largest producer, the US, by more than 100,000 tonnes per year. The US still relies on China for most rare-earth imports. According to the US Geological Survey, China accounted for at least 58% of global production of REEs last year, and possibly up to 80% if you include illegal and undocumented production activity. In some cases, like heavy REE processing, China has 100% control of the market.

The problem here isn’t just that the CCP has monopolistic control of the global REE supply chains, but that it is willing to use this power to coerce and control others. The issue is not a hypothetical one. Realising that controlling the global market makes for a useful economic lever, the CCP has used this power to coerce trading partners on more than one occasion.

In 2010, it effectively restricted rare-earth exports to Japan after a Chinese fishing trawler collided with a Japanese coastguard vessel near the disputed Senkaku Islands.

More recently, it threatened to limit rare-earth supplies to US defence contractors, including Lockheed Martin, over US arms sales to Taiwan.

The CCP’s coercive use of its REE monopolies is reason enough for some nations to seek to create sovereign resilience and insulate themselves from manipulation.

Japan, the US and Australia have each sought to improve their supply-chain resilience. Japan has invested in Australian company Lynas for more than a decade to provide it with alternative supplies. The US government has recently done the same for REE supply chains to the Department of Defense. However, unilateral efforts no longer appear to be adequate to secure alternative supply chains.

The CCP doesn’t want to lose its control of this key market. And it has used a range of measures to prevent the diversification of supply chains. China routinely adjusts its domestic production quotas and subsidises rare-earth prices. It uses this power to strategically flood the market when it wants to drive out competitors and deter new market entrants.

Zhang’s work shows that the CCP isn’t just using economic means to prevent the dilution of its monopolistic control of global REE supply chains. It is also willing to use a range of non-competitive covert and clandestine means to maintain its market position.

Establishing alternative REE supply chains is difficult enough. The CCP’s actions, including its information campaigns, rapidly increase the complexity of the challenge. The key strategic message here for Australia, Japan, the US and other like-minded countries is that market forces alone aren’t going to fix this problem.

National-level policymakers cannot, on their own, solve this challenge. Creating global supply-chain alternatives that promote healthy competition and resilience will require minilateral efforts. Here, Australia, as a source of REEs, must work with countries like the US and Japan.

As a starting point, Japanese, Australian and American policymakers need to address several issues to fast-track the creation of alternative supply chains.

For investors, financing new or emerging REEs has substantial geopolitical risk. To mitigate that, policymakers should consider creating a sovereign REE risk fund to underwrite the commercial risk from the CCP’s overt and covert activities.

The Australian government needs to consider how it might promote Australian industry and entrepreneurs to move further along the REE value chain. Policy levers, including tax measures, will be crucial to success. There is significant potential in the establishment of multi-ore mineral-processing hubs in Australia.

Policymakers and industry will need to find ways to mitigate the effects of both China’s market-distortion tactics and more normal ebbs and flows in demand. Various mechanisms are required, including minilateral REE ore stockpiling and market interventions that flatten out demand.

Australia must engage with industry 4.0 technology and move further along the REE value chain so that it is more than just a miner. Japan and the US ought to see the mutual benefits of this approach. After all, there is no point in creating supply-chain resilience for REE ores if miners must still send them to China for processing.

While these suggestions offer options, they are only a starting point. Over the next year, ASPI intends to increase the public discourse on and knowledge of REEs in Australia. Only through better policy will Australia and its allies achieve the REE supply-chain security and resilience essential in the 21st century.