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Rural Industries Research & Development Corporation
by J A Wilkinson, M L Wahlqvist and J Clark February 2002
RIRDC Publication No 02/015 RIRDC Project No ABA-14A
There have been major changes in the food and pharmaceutical sectors that provide opportunities for Australian agriculture to produce innovative products. Central to these developments is an increasing emphasis on health and nutrition and a growing preference for natural products.
Within the global food industry the link between food and health has resulted in a rapid growth in the market for functional foods, sometimes also referred to as nutraceuticals.
These are defined as foods that have ingredients that provide health benefits beyond the traditional nutrients they contain.
About 25 per cent of the active components of pharmaceutical drugs are derived from plants and this proportion is increasing as the global market for plant derived drugs grows.
In November 2000, RIRDC published a survey of new pharmaceutical, nutraceutical and industrial products and their potential for Australian agriculture by Wondu Holdings. This report identified good opportunities for Australia as a clean, green, internationally competitive supplier of many of the raw materials for these new products. It also pointed to some important constraints such as natural resource limitations, lack of domestic processing capacity and limited economies of scale.
These papers, presented at the 2002 ABARE Outlook Conference, represent a further contribution to the debate about innovative products from agriculture.
Dr. Wilkinson discusses current pharmaceutical and nutraceutical products available from agriculture. He predicts that the share of natural-based medicines will penetrate the largely synthetic global pharmaceutical market by as much as 30 per cent by 2005. The products with the most prospect include ginko, ginseng, garlic, echinacea and St John’s wort. The key target areas are cardiovascular disease, central nervous system disorders, cancer anti-ageing and infectious diseases. Theraputic uses of plants can also manifest through food, and personal care products.
Professor Wahlqvist discusses Australia’s capacity to produce a wide range of basic food commodities, but refers to the growing challenge of producing them sustainably. He argues that consumers will increasingly look to a range of best practice measures in the whole food chain and are also likely to choose products that have a regional identification. New opportunities are offered by phytochemicals with human biological significance and the development of products that take account of food-health relationships. International food security is a significant issue.
Dr Clark argues that emerging technologies and increasing emphasis on preventative healthcare will have a profound impact on pharmaceutical development. He acknowledges Australia’s strengths in supplying these products, but he also identifies a number of weaknesses. In particular the domestic industry is fragmented, with very few vertically integrated companies and limited extract processing capacity. Other constraints include limited pharmaceutical development and lack of investment in development and strategic leadership. He identifies opportunities in the development of functional ingredients and foods from bioprospecting, standardised extracts and transgenic production. Strengths in molecular plant breeding and antibody engineering also provide a potential for specific pharmaceutical development These papers identify rapidly changing market developments centred on health objectives and a growing consumer preference for natural-based products. Australian agriculture has some natural advantages in responding to these developments. However the challenge will be to meet the demand of more segmented, quality conscious markets. This will require changes to current structures, with more emphasis on building supply chains based on strategic alliances and more vertical integration.
This project was funded from RIRDC Core Funds which are provided by the Federal Government.
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