 Hello and welcome back everybody. My name is Ticky Fullerton. I'm the ABC's business presenter, but a couple of generations ago, I also presented Landline and so I'm a very passionate rural business person. It's my delight to present this really important plenary session. You will have heard the speeches this morning including that quite passionate call to arms from our Deputy Prime Minister and dare I say that Barnaby is right but it is a big question why we've got two trillion dollars worth of funds sloshing around in Australia and so little of them invested in agriculture and agri food which is I think one of the new buzzwords and so the object of this morning's session investing in agriculture is to come to grips with some of the reasons for that and how we can change that. We've had lots of speeches as I've said we're not going to have any more speeches in this session we're going to have an hour and a half of discussion at some point I think about 45 minutes an hour in I'm actually going to throw to the floor forgive us because it's actually quite hard to see you out there so if you wouldn't mind coming down to to the speakers if you get selected and state your name and where you're from and be delighted to have conversation I'm going to encourage panellists they don't need any encouragement actually to jump in on each other and have a bit of a conversation in fact one of them's already offered to take over as the moderator so obviously there's a great great deal of passion here and I can remember just 15 years ago going up the New England Highway and seeing you know places like Togo station and you know all this all this all this country owned by AMP and National Mutual and then it was all all sold off and notwithstanding this great transitional economy that we're supposed to have and agriculture being the pillar there seems to be a missing link here so let me go to our panel on my far left Elizabeth O'Leary now fabulous to have Liz because she is actually from the land to Pit Street I think so still some shit on your boots Liz is a senior managing director at Macquarie group with more than 12 years experience in business in Australia the UK and Hong Kong she's the head of agriculture for Macquarie infrastructure and real assets mirror. Mirror agriculture manages two wholesale funds on behalf of its investors with assets in Australia and Brazil she's a very active director on the boards of the funds operating companies with which a powerway pastoral Lawson's Grains and Cruciero do Sol Graeos Limitada which is my best Portuguese. She's had a lot of other roles at Macbank including in London but more importantly Liz you are raised on a rice, wheat and sheep farm in the riverina a decade experience as an active investor in one of Australia's largest Angus cattle breeding companies and you're an owner operator of farmland in three Aussie states so some skin in the game. Moving to John, John Corbett of Hasard Australia. John's an independent consultant with 30 years experience in arranging and structuring capital and business solutions for corporate multinational agriculture and agribusiness clients big career before that at ANZ where he led the New South Wales corporate cotton agriculture portfolio which covered producers, ginning, marketing, cotton dairy co-ops et cetera and grain processing. He also led ANZ's Queensland corporate banking portfolio. Today though John is a director of Hasard a large scale cropping and livestock entity wholly owned by the Qatar Investment Authority operating across Australia. Now it gets interesting he's also a director of Australian grain champions which is pushing to take over and commercialise the grain co-op CBH in the west which I know is a very hot topic. John formed AGC with former CBH directors and a number of WA grain growers so more on that little later. Damian to my right who shouldn't feel in any way defensive today joined first state super in January 2014 as the head of income and real assets which includes fixed income credit infrastructure and property and I should add first state super started life as basically the largest default super fund and I'll get you to explain who your members are a little bit later but Damian previously spent 11 years at Perpetual investments where he became head of multi manager funds and prior to that was at ING Optimix working in investment management and again in the multi manager group looking at tactical asset allocation he's also talked to the AFR already this morning the cheeky bugger and finally David Watson over on my right from Austrade. David was appointed by the great Andrew Robb Minister for trade and investment as his senior investment specialist for the agribusiness and food sector with austrade in July 2014. Obviously an experienced food industry executive having worked in senior roles at Mars around the world including in Dubai where he covered Africa, India and the Middle East and more recently in the head office in Washington where he was a member of the management team responsible for the chocolate division globally all of which gave him a great understanding of the investment drivers for a global food company and a lot of free chocolate. So to the first question let me kick off with a really basic one to David why is it so hard to invest in our future in this country in agriculture? I don't think I can answer that question without talking about the Australian super funds because that very quickly gets to why they are not investing and of course Damian will have far more detailed response than me. From the investors that I talk to and I've spoken to many of the Australian super funds I think there is a structural issue and what I mean by that is that with portability in Australia and the shift from defined benefits schemes to principally accumulation funds where members can move their money very quickly it essentially becomes like a bank account and managers are measured like stocks on the ASX in terms of performance it drives a very short term view of performance and so with portability and managers fears of being judged financially on very short time frames that structure of the industry I don't think necessarily lends itself well to the sector. People talk about volatility though I mean you look at the alternative one of the alternative asset classes which is equities at the moment isn't that a little bit ironic I mean we're talking about volatility in the agricultural sector look at the stock market. Yes it is ironic yet I think the other part of the equation is talking about volatility and performance is there is a history of particularly through managed investment schemes where superannuation funds in the past have invested that have not performed well so there is I think some perhaps not only lack of understanding of the sector but also fear of the sector given some funds that have that have been burnt by investing in the sector in the past and I think that's still apparent to to many super fund managers but you know I actually am looking to Damian as our proxy for the superannuation industry here for his response but can I actually put in a question of my own to Damian to answer Tickey's question and because I'm actually wondering to what extent does it make a difference in the answer between an industry fund and a retail fund so would it be correct to say industry funds are again structured in a way that allows a longer term investment horizon to be considered as opposed to a retail fund? Yeah I mean thank you for that so look that's another fault line or all and of itself so I'll address a few things in turn so I think to sum up your questions it's really around how much illiquidity can the super fund take because as you pointed out a public offer fund like First Aid Super is on any given day our 750 000 members could turn up and say we want all of our money back tomorrow now of course that's unlikely and we've been through the global financial crisis and that didn't happen so we can have some confidence to have a level of illiquidity in our portfolios and by that I mean private assets that we can't necessarily sell within one year give or take. We at First Aid Super are under invested in alternatives we've got about 11% in in the liquid asset classes so we've got appetite to be investing in more and hence why I'm here today we are investing agriculture but I'll I'll get to that um the on average we feel about 20 to 30% in so called illiquid investments when your public offer fund is is about right it's about fair um and some of our peers are around sort of 30 to 40% Aussie super host plus the mothers are at the upper end of that. Who is your membership so Damian and does that impact on your decision making? Look absolutely absolutely so again taking a broader step back um so so to some of the points raised earlier the the Australian economy uh the GDP of the Australian economy uh I think it is circa 1.5 trillion dollars uh the Australian super industry itself is about 2 trillion dollars it's about a 1.3 ratio so it's big and another 10 years based on some fairly basic assumptions super will be 10 times the size also five times the size I should say of of GDP so the key thing for us and one of the one of the sort of eight things we look at when we look at any investment is this concept around universal ownership and what that means is that what is going to make the biggest impact for our members in their retirement in 15 or 20 years because average members in their 40s will actually be on the relative productivity of the Australian ecosystem and the environment so what we like to do is to invest in things across all asset classes be it venture capital be it agriculture be it construction it actually leads to sort of productivity and multiply against across the whole economy itself so tell me about the model you tell me about almonds tell me about the model that you you've put out there because that was quite a big lick of it an investment wasn't it yeah I mean so and again just just as in terms of the arm and ideal I'll explain that in a second but I think also in terms of why super and why now I hope is the question as opposed to why not in the past but why now again we have a broad range of things we can invest in be it infrastructure be it real estate be it agriculture real estate is a very well known asset class very deep very liquid capital markets infrastructure really has come into its own in the last 10 years but is relatively new 20 25 years old agriculture it's starting to in in in our world in terms of it been an institutional asset class I think is starting to come into its own as well so I think that we should need to view all of these developments through time and again the superannuation industry has grown up a lot and can now consider doing investments in the case of almonds what we want to do is we have a range of ways in which we can invest our preferred method is to invest in areas where we can provide bespoke capital solutions to group to groups who can use those funds ideally for more productive purposes on their own on their own funds by the land we buy the land and we have a sale and lease back back to the operator yeah yeah all right let me go over to to Liz because that's that's not really your model is it how have you you Macquarie has been so big in infrastructure it's becoming now much bigger in agriculture as well what's your investment model so existing investment model through our two wholesale funds is actually an operator model and really I think that comes this question comes to the heart of the issue and that's understanding the investor the investor need and the investor appetite and and actually I think one of the barriers to greater superfund investment in agriculture is we the sector have not yet evolved sufficiently in terms of nimble product structures that are reflective of the investor need versus our deep and abiding passion for our operating companies and our businesses we were just talking before about our you know when we package up an investment inevitably folks working in this sector are so deeply passionate about the operations of their business that we can sometimes fall into a trap of losing the investor along the way because it's such unfamiliar territory so is it what who was it was women it was saying it was about risk and uncertainty almost in a sort of rumsfeld way that it's it's almost about your your your known and your unknown unknowns that's that's that's right and so I think there is no you know we we need to be careful not to become fixated on there being a right or a wrong operating model and a right or a wrong investment style here there will be owner operators and they have a place for those investors seeking exposure to the underlying production asset and the commodity as well as you know a real estate that you really favor that model because the the the lease model is quite favored in the us isn't it why why do you not go for that model as well yeah we favor the owner operator model particularly in our grains business in Australia um look partially it's the dynamic of the Australian market we don't have luxury such as crop insurance i'm sure my American friends might and call it luxury but it's a great risk management strategy underwritten by the US government we don't have those sorts of safety nets so as a result there is the the volatility is very real and not cushioned and so as a result we see tendency risk others don't but we see tendency risk in core core broadacre farming in Australia that that therefore leads us in order to manage risk on behalf of investors leads us to have a preference to be the operator we also believe we can generate superior returns as an operator as opposed to a as opposed to that tenant landlord model right so so how do you see what Karen Schneider was saying earlier today about the performance of corporate farms versus the large grower owned farmer farmer owned farms so so the the data is interesting i'm not sure how we actually differentiate between what's a corporate owned farm um and what's a large farm um they're not um they're not necessarily um as linked as many would anticipate you know all i can do is look to the businesses i'm responsible for um and look at their operating returns that are you know about to be um about to be released and i think you know we're pretty we're very comfortable with where we are sitting but i think at the end of the day as i know john you would attest to through your exposure to hasard this is a long term investment horizon you need to be willing to understand and live through the natural volatility in the cycle um and also appreciate as an investor how much of that volatility you want to be exposed to all right john let me ask you about hasard because they're you know a katari investor and originally presumably it was a food security thing that that drove them uh to invest in Australia is that still the case so hasard and a number of other parties i guess looked at this these sorts of investments from a food security perspective but um you cannot make these investments work without having it economically based it's got to actually deliver a rate of return and so um whilst you might have a focus on production um that production's got to be economically viable otherwise at some stage or rather it is uh not not going to be sustainable as an investment both from a point of view of um current production but also from a long long year of deep perspective of investing further capital into the business so um i think all these models that people look at um they have a genesis somewhere but it's a question of how they evolve and that's comes through already on the panel today i think from a agricultural perspective we are on the on the very beginnings of the evolution of the investment models that are going to be attractive to institutional capital to come into the sector the other important thing i think in this is also how you then um align management in agriculture people point to volatility but you can also point to um like any other sector parties who operate very very well have made great wealth um in that sector in a lifetime um so in my career i've banked farming families who start off with next to nothing and have net worth well in excess of 100 million dollars today after one generation that's because they are very very good at what they do how do you start to capture management in this sector and actually be able to align that back to uh an investment model i think that's one of the um the key things that we as a industry sector still grappling with and struggling with and hence that sort of draw from drives your um your operating models about uh owner operator um versus a lease type model okay now look i want to ask you obviously you are right in the thick of this um proposal for cbh but could you maybe give us an insight into your experience over the last 12 months trying to raise this 600 million or so and um what the response has been from the institutional community so i think what i've seen is uh and has been touched on here is that different institutions are still working through and understanding the sector so there's still quite varying amounts of knowledge and understanding the sector and it's a very immature sector for a lot um it's interesting how as we went through so cbh is a business is largely an asset um business in terms of the infrastructure of moving grain from our country to port and out so it's a big asset infrastructure business which has volumetric risk and it's amazing how often parties that we're talking to want to talk about commodity prices which had no real bearing to volumetric risk because at the end of the day if you're a grain farmer and that's your setup that's what you're set up to do you'll continue to plant each and every year expecting that to be an improvement in prices even if they're not quite as favorable at the beginning of the season so it's actually the understanding aspects that we we found that was difficult as we went around talking to institutional capital and then of course overlay with that volatility so um I guess again the misunderstanding about the the real volatility versus what they read in the paper now they pick up the front page of the Australian you know I had the picture there of the the drought at long reach and cattle staying there in the field with not to play the grass and they equate that to all of Australia agriculture um and just trying to get people to understand how with modern farming practices saying in the grain sector that volatility is being managed and indeed how the improvements in farming practices has so greatly improved the ability of the farmer to deal with uh low water years and greatly increased the productivity on much less amounts of rainfall so we found that you know as we went around we've had very different understandings of the sector and it was a a long slow journey to get the institutional capital of the line okay so so Damian uh are you involved with grain champions are you involved in this deal yes we are so what's your what what is your journey being and why are you attracted to to what might be happening yeah well i mean it starts from a thesis that that we have at first state super that um when we look across the world across all asset classes that um there is a lot to really like in Australian agriculture to similar to what john said um you know Australian farmers and growers are globally competitive they're they're they're very productive it's an asset class in which we would like to have more exposure over time that doesn't that doesn't address necessarily the implementation and execution challenges of which there are many um but our approach in terms of um our development being a uh sort of a crawl walk run style approach to agriculture is is to approach it more from the credit angle so for example what we're doing in in almonds is a sale and lease back it's credit analysis of the counterparty we're also doing some um some some some water sale and lease backs again in credit analysis in a lot of ways um we're looking at this when we're approached for this opportunity um to look at it from a credit angle um and um we can do the work on that we know how to do credit work and um the the deal stacks up assuming the growers want to do it and Liz you you'll be in this if the if the if the growers wanted if the farmers wanted uh it's not within mandate for our current um our current fund so unfortunately we won't be participating but um it's interesting sitting on the sidelines and just watching innovation circle around the sector but can I pick up on something Damien said about you know that the approach he's taken to evaluating investment opportunities presented to him and I think yeah there is there is a real lesson for us is you strip it right back to something very simple and very fundamental and and there is a lesson in that for those asset managers in the room um attempting to create new product uh and evolve their existing platforms to take them to market we need to make the complex simple um and unfortunately in the sector I still think we've got a way to go in in articulating our value proposition in an investor's language and and so I think that's a that's a real lesson learned um for for folks raising capital for particularly for development projects okay can I can I also put it out there that it's it's um getting the public on site as well and a lot of these uh a lot of these big big deals um for example there is a a a a different side to the to to your deal uh which which are growers and I I know the deputy prime minister is not not in favor of it um which is that um you know gwa was perfectly all right and graincourt should never have happened and this is going to happen all over again now um if that flared up um Damien is this something you worry about being on the y front page of, you know, in terms of political backlash? Yeah, look, I mean, with any of our investments, there's always the front page test of how will this look, how will this feel. At the end of the day, we're representing 750,000 average Australians, nurses, teachers. They would love to see us do more in agriculture. So when we did the almond farm, they were thrilled that their money was going into this. So it certainly is an easy story to tell, assuming behind the scenes we're making it work operationally and financially. Yeah, what's not to like about almonds? Yeah, exactly. But then when it comes to this, our position of this is simple. We would like to invest more in agriculture. We would like to have an opportunity to be providing finance to this, but at the end of the day, it is up to the growers to decide. I should give John a quick right to reply on that. No, that's exactly right. It is for the growers to decide. And that's certainly the view from our perspective as well as the Australian Grains Champion that at the end of the day, the growers are the ones who will be the best place to work out whether this is appropriate for them or not. OK. Can I make a point there, Tiki, in relation to social licence to operate? Because in this role over the last two years, probably the greatest learning I've perceived is the importance of social licence to operate, getting the growers on site and putting aside the fact whether you're on the front page of the media or not. I think in regional communities, that's a key critical success factor and you can have all the financial terms right, you can have all the legal terms right. If you don't have that social licence to operate, I don't think you have a sustainable agribusiness in Australia. And the case study that I use, I think of an organisation that's come from outside and is undertaking a very major economic development project in the north as Shanghai Zhongfu in the Ord, who I think have undertaken an outstanding programme of engaging the local community, including the indigenous community, in everything that they're trying to do in the Ord. Yeah, you're quite optimistic about the north, aren't you? I mean, that to me is higher risk territory, is it not? Yes, and it's not for everybody. Yes, I'm quietly optimistic, not underestimating the challenges, which are numerous, particularly in relation to infrastructure and labour and the like, but I know I'm quietly optimistic because I think there are opportunities in irrigated cropping on a mosaic basis. And then you look at some of the processing that is going in up there and there are some prospective projects for processing in the north, which opens up other income streams for cattle producers. Whereas presumably, Damon, that would be a space that you might leave for others to start with. North and Australia? Yeah, look, I mean, I think when we engage with the federal government when they were doing some sounding, it sounds very interesting, but I think it probably needs a bit more maturation from us. I'll hop back to David for a moment, because I just want to continue on this idea of public influence and political interference, if you like, in the investment story, and particularly as regards foreign investment. We had the Port of Darwin decision, that seemed to affect a Chinese investment decision. I don't think it was agriculture. We've had Van Diemen and we've got Kidman in play. How do you think this should be handled? Can it be handled better? I'm not going to make an observation or comment on the policy settings or cases which are under advisement, basically, where the treasure is in the process of making decisions. I suppose my remark would be, I think if you step back and do a global analysis of where we're at on foreign investment in this sector, we're not as bad as we often think we are. We're very good at focusing on the 0.2%. I would actually flip it and say, in my role personally, I focus on what I can influence and what I can control and what the good I can do in the time that I've got available. That is the 99.8% of good investment work, as well as working with Australian investors to get an investor ready. I'll leave you with this. The Committee for Foreign Investment in the US, which is the US body somewhat akin to FURB, it is undergoing exactly the same sorts of dynamics at the moment in the US in relation to Chinese investment. That's a process which actually allows the president to disallow a potential project. The only presidential disallowance under that process in the last five years was a Chinese party proposing to buy a wind farm. So why was that disallowed? Well, it happened to be close to a military base, so sound familiar? So everybody, every nation is grappling with these sorts of issues and I think we're doing as well as could be expected. Can I ask perhaps then both Damien and Liz how do you see the sort of competitive tender situation when you're looking at a big agricultural asset in play and you've got sovereign-owned funds who may have very different strategies, very different objectives that affect what hurdle rates that they have. And it's almost impossible to compete in terms of the absolute amount that you're prepared to offer up front. Liz? In my experience in the tender processes and public auction processes we've been involved with, I think it is still, back to John's earlier comment, it is still pretty rare that that gap is as wide as we may see in other asset classes, to be honest. I still think, I agree with John, I still think we're still seeing strong evidence of some economic rationalism. It's not to say there aren't some, while price is being paid for assets from time to time, but look, that's a competitive marketplace. But I think there is no question there is a variation across the board in terms of the cost of capital and that obviously flows through into purchase price, that's a competitive marketplace. For me that's quite a part from the FFURB discussion, which I think is an interesting one to have, I think how... So you're happy with the new thresholds, the 250 million thresholds? I think from our perspective, my experience with international investors is they expect a degree of scrutiny if they're seeking to buy farmland. I mean arguably the thresholds are actually much easier for them than other parts of the world, I would imagine, New Zealand and Canada. Exactly, it's very difficult, it was virtually impossible for FFURB and the government under the old regime to achieve transparency around farmland transactions. So reducing the threshold, understand, appreciate and I struggle, I would struggle to think of any investor who would have an issue with that. I think the pragmatism we've seen in terms of the implementation of the register has been, actually it's been very sound. We've seen an extension of deadlines for those struggling to get the right information to the ATO in time and just some general degree of understanding around the usual bumps and grinds of implementing a new process. I would however say that there is some caution around process efficiency, FFURB but they're doing their best under significant volume, but for me around this level playing field question, the extent to which there are unnecessary delays may inadvertently lead to some disruption in the fairness of the auction system in particular. And what about the cost of the system? And look, the cost is obviously of concern to us. So, you know, I think, you know, when we... These fees? Fees, I think we need to be careful about how we think about fees. So, you know, by way of comparison, if a foreigner would have come into Australia and seek to buy a business with a, you know, check size of a billion dollars, they pay the same fee as a foreign investor would pay to come in and buy a $10 million farm. So, for me, then, I start to say, have we got a relativity issue around fees that is just a detractor from investing in a sector that requires further investment. So, I think it's a, you know, there is some tension around that element and the administrative elements of the system, but overall, you know, I see the rationale and the logic behind the policy move. John, that you agree with that? Yes, I certainly do agree with that. Having the threshold of $15 million in a global context, as was raised earlier by the FPPM, you know, we don't have unduly restrictive practices around foreigners investing in Australia. The $15 million is just, yes, is a lower hurdle. Yes, it means that the market's got to change its dynamic around how they might actually sell properties. So, for example, if you're looking to sell a property and you think there might be foreign interest, you won't go to auction because a foreigner can't do an unconditional contract. So, you know, it's just a market dynamic issues that have to change with it, but it's just another part of the process. Fees are obviously a problem because it does create a disincentive for foreigners to buy. But flip side, I guess if you're a foreigner looking to invest in global farmland, Australia is certainly one of the more attractive places for you to do that. If at the end of the day, if that's the fee you've got to pay, I guess some of them sort of gulp and just grin and bear it. And I guess that's where the government has come from in seeing that fee, right? OK, David, the other regulator, of course, in terms of the domestic market is the ACCC. And we see our first agricultural commissioner, Mick Keog, who I think is attending the conference. Now, do you think this is likely to change any of the way the markets are seen in Australia and help or hinder investment? From investors? Time will tell. I can't predict one way or the other. I don't think from an investor perspective, who are the people I mainly work with, they will think of that appointment as either necessarily a positive or a negative. The appointment's in place. It's great, but I certainly don't think it'll be regarded as any concern from an investor at all. OK, can I move on? In a few minutes we'll throw the floor, but can I move on and ask the panel about supply chains and the importance of supply chains in terms of this goal of providing value-added product, particularly up to Asia. Where, David, are the opportunities in supply chains? I think the opportunity is in capturing value through integrating those supply chains, particularly into Asia, and I think there have been some great studies, or there are some great case studies of deals that have been done along those lines. So one example is the Fonterra being-made deal, where there's local production with a joint venture with an off-take-up who is then providing distribution into a foreign market. I think that's a really good example of integrating those two organisations' supply chains. And I also happen to be a great advocate for joint ventures. I think that is a real way to go when it comes to not only capturing that value along the supply chain, but also investing in this sector in Australia. Damian, for example, would you consider joint venturing in some sort of structure with an international investor, a foreign investor? Going forward in agribusiness? Yeah, look, we would. I'd say in our development it's probably a bit over the horizon. So again, back to sort of the crawl-walk-run approach. We've had a look at one opportunity around beef, and that was ultimately taken up by Chinese distributor, but we had a look at it. Was this in meat processing? Yeah, the whole thing. Yeah, so from paddock to plate. So we've had a look at a few things. It's not high on our radar at the moment, though. All right, all right. Did you find yourself recoiling and looking at the meat processing industry in a world of pain and thinking, oh, you know, why would we ever go there? No. Yeah, so that's it. I mean, I'm looking again at cycles and how maybe a country like China or even Qatar sees the meat, the beef industry in this country, John. I think it's just on this. I think just quickly. So look, I think the way we think about it is back to sort of Liz's point is what do we know at First Aid Super? Well, we know how to do, invest in financial instruments. That's one thing we know. So we'll part with people who know hopefully the value chain opportunity and who know agriculture. But what we're trying to do is when we go into infrastructure in real estate, because they're deeper, more liquid markets, we're often better able to allocate risks to certain counterparties. So when we look at that with the meat thing, we wouldn't be, you know, that would make sure that was with an aligned operator who could handle that as well as possible. The supply chain is an interesting one because I think the big thematic that's coming through in relation to the agricultural sector is traceability. And the only way you can actually deliver traceability is to have some controlled supply chain. An interesting transaction that I've been working with a couple of parties on and off in the last 12 months was on the cotton sector, where the key issue was a company up in Asia that was the manufacturer for clothing products for some very major global brands, very household name brands. The brands were seeking to ensure the sustainability of the supply source for the cotton. So they wanted to make sure that the cotton was coming from an agriculturally sustainable production and not production that was environmentally, sorry, environmentally unsustainable. And so for them, it was actually about how do we invest back into cotton production? So we can literally say to our customer that we can guarantee you not only where this cotton came from, but right down to the actual paddock and why applications or chemicals were on that paddock, et cetera, et cetera. And they're prepared to pay a premium for that. And we're seeing that in other markets. So we're seeing that in grains. We're seeing that in meat. These are the things I think from a supply chain perspective that there is ability to create additional levels of value capture. And so how you start to put those elements together, I think is one of the interesting opportunities moving forward for Australia and also how we then integrate Australian investment and foreign investment from paddock to plate. But if, for example, I mean, just taking the beef industry, if you look at it from, say, Barnaby Joyce's point of view, you've got this protein demand to our north, you've got a very, very strong live export market, you've got a meat processing industry really struggling, you've got the Chinese looking at developing their own meat processing markets. So before we even run out of breath saying, oh, there are any wet markets up there, what are the chances that we're going to miss this opportunity altogether? I think you've got to look at how the sector is evolving. So at the moment, the live export is meeting a particular market demand and also a particular market failure. So in Indonesia, for example, the market failure is actually the domestic supply chain system, a refrigerated domestic supply chain system. So a lot of that live export is actually going into local abattoirs in areas which don't have that. That is evolving. And as it's evolving, of course, the type of cattle that we're putting in there is actually of a generally a lower quality animal to say you're black angus, you're not live exporting black angus. But could we end up live exporting black angus from the south to China to their meat processing industry? I think what you'll find is that as it evolves, that the higher end value consumer will want their black angus, and I want that actually from Australia, processed in Australia, so that they've got absolute clarity as around where it's sourced from and that there's no contamination issue. So it hasn't gone to a Chinese abattoir and potentially been washed with contaminated water, for example, and that at the live export end, you're sort of meeting a different market demand at the moment. But that market demand over time will evolve. So I think we just got to be careful here about horses for courses in terms of the processing opportunities versus the live export. I don't think one's going to dominate the other. They're both discreet and we've got opportunities in both markers at the moment. But I think over time, live export will evolve more to a processed product. So presumably, David, one of the big challenges is to get that clean, green value add branding idea into the Chinese market in the way that maybe like a Murray-Golburn has been able to do to some degree already in mill. There's not much more I can add to what John said. I agree with everything he's said, and I think there are some good case studies of companies like AA Co. I like the way that they've transitioned from being a beef producer, strategically beef producer to a fully integrated branded beef company, selling their product offshore. I think that's a really, really good story. Can I ask if anybody would like to come and ask a question now? Anyone up there, please feel free, any subject around investment in agriculture? Hugely broad now. Yes, sir. Hello, great panel discussion. Thanks so much. A question, Damian, for yourself. Tiki, it really relates to the radiata pine just behind your left shoulder there. My name's Ross Hampton. I'm the Chief Executive of the Australian Forest Products Association. One of the amazing things that's happened in the sector in the last 10 years has been a real influx of overseas money for an investment, and it's largely gone unnoticed, but it's meant that we've been able to regear the whole sector, five odd billion over the last few years. And if folks were here from those big North American superannuation funds largely, they'd tell you that they're making fortunes. And yet, you know, there's, and it also, I should say, means we're looking very much at a growing agriculture and farming and joining together smaller, widespread mosaics of forestry to grow our state in Australia using farms and gaining the ecosystem services payments and the carbon payments. But Damian, the question is, why aren't Australian super funds participating? This was the minister's comment, I think, this morning as well. So five odd billions come in the last 10 years. David Brand from New Forest says there's another 100 billion just waiting for us to free up more assets around the world, but we see no action from Australian super funds. Yeah, I mean, I think there has been some investment in local timber. So look, I can't comment on what some other peers have done. I understand some of my peers have invested in timber. We haven't yet, but we're certainly looking at them. There's a number of things we're looking at and considering. Time will tell whether we make those investments. So take it back to my previous comment. I think really there is a case here for stages of development. Now we've had, I know particularly a lot of the Danish and Dutch pension funds, some of the North American funds have reached a scale and a critical mass to self assess these things and have been more proactive than we have. Now that we've reached a certain scale, I hope to be there and investing in these sorts of things. So I think it's really now just a matter of time. I would also say though again to the point there that I'm not familiar with your product, your structure, but a number of the structures and investment vehicles that have been offered to us haven't necessarily been that fit for purpose. So I think it's a stage of development. What are the best structures for super funds or for your super fund and in particular is there a minimum amount that you would be, it's quite large amounts you're talking about in terms of investing, aren't they? Yeah, it is. Look, I think it's again to build on Liz's point. I think it depends. So we haven't gone into any closed end funds to invest in agriculture in Australia. So if we've invested, we've invested in for a separate account or in our own trust, in our own vehicle with our own name on it and everything set up our own way with the documents that we've diligence in with our own exit and liquidity rights attached to it. For smaller investors, a pooled fund might make perfect sense. But you'd want to lay out what a couple of hundred million or something. Correct, correct. So for an individual investment for us to actually be able to allocate the resources given our finite resources, ideally 100 to 200 million dollars. And do you have a specific return you require? Look, it depends. We obviously have a minimum rate of return, which typically is a margin above inflation, but that's not that hard to beat. I think it's more around what is the appropriate return for the relative risk. At the moment, we're looking at the lower risk spectrum, more around sort of saline leasebacks. In time, we'll probably look to do equity. All right, another question. Yes, sir. Richard Heath from the Australian Farm Institute. My question is to Liz initially, but the rest of the panel might want to have a go at it too. Liz, you mentioned briefly the need to have more nimble product offerings in terms of business structures. I'd like you to sort of try and forecast in 10 years time if the sector does manage to come up with these more nimble product offerings. What do you think the balance of investment will be? Whether attitudes will have changed and we have been better at attracting patient capital or whether we've got these other product offerings and we're getting used to seeing capital cycling in and out of ag. What that balance will be? Look, it's hard to prescribe sort of what's the right number, what does success look like. But you use some language, I think, that is particularly useful and I use it myself. And that is that we should be looking at comfortable cycling capital in and out of agriculture and agricultural investments. That's new language for those of us who grew up on family farms and the farm either stayed in the family or left the family. And now we have to get much more comfortable with a new environment in which we focus firstly on developing a long-term business focus, sustainable agri businesses that can stand the test of time almost irrespective of the capital cycling in and out. We have to give the capital a reason to cycle in and out. But if our overwhelming drive is to develop sustainable agri businesses with proven track records, then logic would then flow that the capital will see those opportunities as attractive. Now, typically they're a bit larger to Damien's point. We need to acknowledge that, particularly if we're trying to attract superannuation and endowment fund capital, putting small checks to work is tremendously inefficient and really just not practical for their business models. So once again it's about us understanding their business model and readjusting our product focus. So I hear a lot of frustration in the sector when owner operators in particular say, look, I've got this great business plan but I only need a couple of million. And it's not criticising the business plan or the objective or the operator, but putting yourself in any institution's shoes, it's very difficult to find ways to plan that space. So I think some of our challenges are to find a marriage of the small and big opportunities in a creative way. Once again, back to David's point around not jeopardising the social licence factor around our obligation to community, to environment and to country. So I think there's some complicated business models, but I think also we can be flexible here. Sounds like there's a business model out there ready to develop. But can I pick up or just add to that? Karen Schneider said, I thought it was very interesting that we don't expect corporates to transform the family and farm model, but go beyond 20% anytime soon in Australia, she said. I was very surprised at that. Do you agree with her? Let's just look at the landscape. The family farmer is still overwhelmingly the predominant player in agriculture in Australia. But do you think it's going to stay like that? In the foreseeable future, at the rate we're all deploying capital, it is very difficult to see an environment where the family farmer becomes in any way dwarfed by an inverted commerce, the corporate farmer. But I'd go further than that and say, does it matter? Does it matter if we've got successful farming businesses being developed, employing people, committing themselves to local communities, generating all the sort of social licence that we all desire in order to operate? I don't see the two models as being mutually exclusive. I think the market is well and truly large enough for both. I can just add to that. The interesting thing in Western Australia is, for example, 15 years ago, there was 10,000 grain growers growing on average about 9 million tonnes. Today, we've roughly around 4,000 growers growing 12.5 million tonnes. What's happening is the family farmer business is getting bigger. They're getting bigger, more sophisticated. As they're developing, they have more access to internally generated capital that they can actually sustain investment in their business and so therefore a cycle. So the family farm itself, as a model, will very much remain the mainstay, but they are getting more and more like a business in the way that they run. I actually didn't fully answer the gentleman who had the question about the radiartar pine and local timber. Do you mind if I go back to that? It's a good question and I think if anything, having thought about it a little bit further, some of my peers actually do tend to invest more in offshore timber than local and there is one reason, and I'm not saying that's right or wrong, just one reason that has sometimes been given and we've thought about it a little bit, is that if you look at our members balance sheet, it's two things really when they approach retirements. Their house, which I mostly own outright as they approach in retirement and their superannuation and typically the house is bigger than the super depending on where you live. And so we're very sensitive to investments that have a correlation to residential house prices and sometimes depending on the nature of the timber production, it can be sensitive to the house in cycle and so tends to be if our members got, you know, their house prices have been challenged because the timber prices have been challenged as well. So that's sometimes the reason we do think about things and what can be diversifying from our overall exposure. Combine with the fact that as an investor in Australian shares, that tends to mean we're in a lot of Australian local banks. So banks, houses, it means sometimes we're a bit wary of local radiator. Okay. Yes, yes. That just makes me ask. We've talked a lot about rates of return from the superannuation fund perspective, but it makes me think how important is preservation of capital as part of your investment thesis as well as having a diversified portfolio which is not correlated to public markets. Yeah, critical. And that's absolutely critical. So our benchmark for our broad funds, so we have about $55 billion, about the biggest fund we have, most of them are in our diversified fund which has a CPI plus hurdle rate. So it's very absolute return. Equally there'd be many agricultural assets who would be a long way from anything to do with the housing market, which I heard on the drive up here actually is bigger than the mining industry now in real estate. And I'm going to get to that. So I think that that's timber, right? Done. So broader agriculture is actually in the main very diversifying to our broader exposures. And I'll give the example of our sale and lease back of those three plantations in New South Wales, Vic in South Australia. What happens there to impact those returns has nothing to do with what's happening on Wall Street. It's not much less happening to do on how that operator is growing those almond trees and how it's been watered and whether the bees are, you know, it's very localized. It's terrific. It's exactly what we want. Okay. Any more questions for a moment? Tiki, over here. Yes. Sorry, I've lost you. Lady in blue. Lady in blue. Oh, okay. Do apologise. Yes. That's all right. That's fine. Thank you. My name is Robin Clark. I'm a farmer and a company director in the agribusiness sector. My question is to the panel generally and perhaps to David specifically. It's interesting that a number of countries' sovereign funds invest in Australia because they see it as a great investment opportunity in the long term. And yet Australia has its own sovereign fund, and it's called the Future Fund. And it has nearly $120 billion in it. And it has it in its investment policy mandate that it can invest in agriculture. Yet the investment in agriculture to date is less than 1%. So it's lost in the rounding. To me, there's a great opportunity, and I'd like to know what your various panel members think about partnering with the Australian Future Fund and by leadership that fund, perhaps now with our new Deputy Prime Minister, can lead the way. But there's a great joint venturing and partnership opportunity there. Great question, Robin. Yes. Again, maybe Damian can, or the others can give a more insightful answer, but all I can say from the investors I work with, there is an enormous amount of appetite from overseas equivalents of the Future Fund, overseas sovereign wealth funds to invest in the sector in Australia. So they are constantly looking at investing here. As to the Future Fund itself, I really don't know what their investment theme really is in agriculture or their approach to it. All I know is I think they've got 16% allocated towards what's called infrastructure and timber. But I don't know how much of their, that's of their total fund. I don't know how much of that actually comprises agriculture. And you've quoted that very, very small number within that 16%. But I'll hand over more to the experts. So we work with the Future Fund very regularly, as we all do from time to time, and then we might compete in the next week. But they have a very particular mandate. And I can't speak for them. I wouldn't speak for them. I don't know if that 1% is accurate or not. I do know they're very large investors in timber, both locally and offshore. They don't have the same mandate that we do. This is for the federal government. This isn't for the average member with a house on the balance sheet. So they're far more open to timber locally and offshore. They are looking at agriculture. They're looking at it. And we talk to them regularly about opportunities. What's to stop them finished looking and actually doing? They've actually got a very heightened sensitivity. So I think this is something we all need to be front and centre of. Does it come down to, oh, well, we all know who the CIOs are all over the place. And actually, you know, if they step out there and hop into dairy or wherever and the whole thing falls flat, then it'll be that chap or that woman who will be accountable. Is this because nobody really wants to go off the edge because we've been out of agriculture investment for so long? No, I think it's more the case of the Future Fund The Future Fund, like us and like other large funds, we have a wealth of things we can invest into. And agriculture has to stack up versus other opportunities we can do in liquid asset classes and other real assets such as real estate and infrastructure. It has to stack up on the returns. It has to stack up on the liquidity. It has to set up a range of things. So I think it is getting better. But to my point, I think that the debate in tenure time is going to be completely different. I really believe agriculture is starting to be an asset class of its own. It hasn't been in the past. To the Future Fund, and again, I don't want to put words in their mouth because they run their own. They run a very, very, very good approach. It is a federal government agency. It needs to be very careful on what it puts its weight behind. And there are a number of initiatives here that we're talking about that are topical and so they need to be very careful. All right. Anybody else like to comment on the Future Fund? I mean, if it is very much a government thing, taxpayers' money all in there, then isn't there something, dare I say, picking winners, but given that agriculture is one of the planks to transition this economy, isn't there something that should encourage the Future Fund to go for it? I think the overriding question on this is that the Future Fund, like some of the other funds, which are very large, so the Future Fund is over $100 billion, it probably has to reinvest roughly $20 billion a year, I guess. How do we as a sector package up investment transactions of a size that's going to actually be material for the Future Fund? They are not going to be interested in five, 10, 15, 20 million dollar deals. Indeed, they are not going to be interested in anything under maybe $100, $200 million. How do we as a sector start to present opportunities that make sense to them? But why wouldn't they be interested in a good chunk of the Kidman property, for example? I don't know if they did or didn't have a look at it, but I'm just making the overriding that they need to see transaction flow that they can actually look at, compare against other asset classes, but are of a size that they can actually spend the time to do the analysis of the investment decision, and that's our challenge as a sector. I think it's fair to say, Tiki, there is a huge investment in time we're seeing and experiencing from the Aussie supers and the Future Fund in understanding the sector, in unpacking it and ensuring that they understand the relative risk reward equation, and that's quite understandable before they dive in. They've all got their respective fiduciary accountabilities, they can't just make a bet. So I think part of it is, I know there's a frustration because it looks like a relatively straightforward solution, but there is a logical process that needs to be undertaken to ensure the education's right, to ensure the deals stack up, the proposition's right, and so it's really incumbent upon the sector as much as it is upon my friends in the superannuation industry to really collaborate on quite a meaningful education process. I guess the frustration comes from the fact that there's certainly a public perception that other foreign investors can see long-term value in Australian agriculture. Our own superannuation industry is looking at long-term investments to secure the future of their members, and there seems to be some sort of mismatch in why the two can't get together. I think to Damien's point, many of the offshore investors we deal with have been exploring this space for a much longer period of time. Often their investment drivers and mandates are slightly different, or they're actually seeing the Aussie agri space as a tremendous defensive diversification play. Whereas if it's in your own backyard, you look at it naturally through a different investment lens. So I think we need them all. We don't want to alienate one or the other. We need them all, but I think they're just at a different stage. Many of them are at a different stage in the journey, and quite frankly many are at the same stage. It's a very legitimate question. It is absolutely appropriate, but I just think it is very hard to do it. Well, they're here, why aren't we? I think we've really covered a lot of the points, but ultimately there are strategic investors from offshore and they have a completely different mandate. There are financial investors from offshore, and as I've said, the Europeans and the Canadians have been active here for decades. They had hundreds of billions of dollars 10, 15 years ago. They had large, massive investment teams. They knew the value of it and they've done the work and they've come out and they've invested. So did our super industry 15, 20 years ago? They had a bit of interest in agriculture. Yeah, and those that have made early investments have been very, very poorly rewarded and the trustees are very low to go back in. All right. Yes. Gentleman up the top there was that? Oh, here. Right. Yes, sir. About 10 years ago, Bill Hurditch is my name from the fifth estate in Sydney. About 10 years ago, the Australian government introduced a range of water reforms and that sort of tended to stimulate a lot more industrial agricultural farming. My question to the panel is what are there, the panel's sort of top three remaining reforms or levers that government has at their disposal other than rating the future fund to encourage greater investment? The California is currently ripping out armen trees because they haven't got any water. They would love to have water reform like we've had, but what are the other levers that are at the government's disposal? Damien, can I start with you because you actually mentioned to me how that particular water reform really made you a lot more comfortable? Yeah, look, I actually... I'd love to hear what the other panelists have to say because I'm sort of bereft of ideas of policy reform to do next. I'm sure they'll have better ideas. But in terms of our experience with water, again, it was a topical topic for our trustees, but we spent a lot of time with some of our operating partners to understand the space and our view is that our water trading market has a range of opinions, but it is hard fought on one and that it is the envy of a number of groups such as the Californians. There's a range of opinions on that, of course, still. But it is a market now which is functioning, which has allowed us to come in and offer sale and leasebacks for farmers, typically family farmers, that want to free up some capital off their balance sheets to reinvest in their farm. David, can I ask you for your thoughts on the reform front? I don't have any silver bullets or magic bullets, I must say. No, it's the Prime Minister. So, I might pass to some of my colleagues. Yes, I'll take it. Look, I think water is a great example and I would concur with Damian he's a definite competitive advantage when I'm offshore and I'm talking to investors about dealing with climate change and dealing with climate risk. Our water regime is, without question, a positive particularly relative to our friends in California. I think the other area of policy and government intervention that we can't overlook is really the tremendous advances in trade policy and trade relations we've seen particularly over the last 12 to 18 months. Just opening the door even optically to the world further in a more competitive landscape is a tremendously positive story and creates a positive outlook. So, I do think it's been more than water. I think water and trade are really important. Then I think you can dive down into particular sub-sectors or geographic areas and we could get into the weeds here which we love to do in agriculture but David and I have had long discussions about land tenure reform in the north as being a priority possibly required for really significant development in the north to eventually particularly in farmland conversion. I think you then break it down into sector specific objectives but I'd step back from that and as an industry I'd challenge us not to necessarily look to the government and look to policy to drive our sector but I would come back. We've talked a lot over the last hour about the investor perspective bringing capital in but there is still a bottom-up imperative on farm within our operations to focus on productivity and ultimately strong agri businesses with a strong productivity agenda willing to embrace technology, embrace new genetics, embrace R&D by virtue of their success if they do all of that prudently will attract capital and it'll either be fresh capital from fresh equity or they'll be able to tap the debt market effectively than they have been in the past. I think to David's point there's not a silver bullet out here there are a lot of factors but at the end of the day if we lose focus on running really strong underlying operations with a strong business strategy, a strong view around trade flow and supply chains if we lose sight of all of that because there's some interesting dialogue around the macro I think we're perhaps missing the greatest opportunity. We're going to drill down on that stuff after lunch I think in one of the sessions but John, what's your view? Do you have a view for example on as I was saying the ACC and markets and whether companies should be allowed to get bigger? Well I think before we operate in a very deregulated environment in agriculture anyway a lot of the reforms have occurred in the last 20 years with what we've seen in the grains industry and I think I agree exactly what Liz was saying that's actually more the focus has also got to be on the productivity side but we've got some fantastic examples out there and we've got sectors which are very much lagarts I've had a huge amount to do with the cotton industry in my career and I keep looking at that and thinking how wonderful these guys are reinventing themselves decade after decade they've grown productivity there and just in terms of farm productivity by a compound 3.3% per annum now for 25 years straight there's not another egg sector out there that you can really point to that's developed itself to that level of embracing technology embracing change and constantly innovating itself they're the sorts of things that I think that have to be encouraged and so from that perspective I think that the only area I would be really arguing that we need to have a good look at is how we are structured now and moving forward in terms of our investment in R&D investment in skills we've seen the sort of dissolving of the rural aid colleges over time sort of a de-investment in skill basis I was talking to the person from Melbourne University before and they were saying that they've had encouragingly a seven fold increase in applications into their Bachelor of Agriculture course in the last sort of 10 years so maybe we're starting to see a reversal of that and rebuilding of skill bases in the sector which I think is vitally important Right, one up there I think Thanks Tiki and great panel, Georgie Somerset a beef producer and director on various boards really interested to hear about the productivity and I'm just interested John on this whether you could just give us a bit more of a perspective on how you see that investment in productivity we heard earlier from Karen that that's where the next I guess benefit and return on investment is going to come but also is there potential there for more public private partnerships between people like yourselves potentially around things like telecommunications infrastructure and things that might enable us to take advantage of the digital age or whether there are other models for investment so you talk about having investor ready models something really talked about to today the owner operator or the buy and lease back are there other models that you see as being effective that will help drive the productivity in some sort of joint venture capacity or public private I can only speak for the productivity agendas in our couple of businesses so obviously we've got a large livestock business operating across eastern Australia and then a large grains portfolio in the west and the east technology is obviously a big category or a big label but we're very excited about the impact technology has had on both of those businesses in terms of not only the productivity agenda but addressing the traceability imperative and product safety and security so are we doing more with less absolutely are we doing it in a more prudent way particularly with respect to water utilization absolutely and are we chipping away at those one percenters which is really what the industry is all about at those one percenters in terms of productivity gains in both businesses the answer is yes in terms of what are the obstacles to more of that obviously once again we circle back to the availability of capital to deploy state of the art technology and equipment right across 80,000 hectare cropping portfolio obviously requires a significant upfront investment to reconfigure farms and apply the machinery and the technology in the way that we do so obviously having capital to hand is fundamental for that now there are lots of different models for bringing the capital in that we're already seeing at play in Australia it's not simply an owner or operator or an lease back it's the way you construct and collect that capital that's the interesting piece are we going to see more joint ventures I think you're seeing joint ventures you're seeing commingled funds you're seeing large scale investment mandates from single investors you're seeing some really creative structures to embrace capital and who's at the forefront of that driving the innovation in that space so there's a combination of investment managers superannuation funds and pension funds both Australian and overseas and some really innovative Australian local operators often family operators who've built to a certain scale have a solid capital base a solid balance sheet they're not in distress they're actually set for growth and there's a real distinction there it's not a replacement in this situation they're poised for growth they have the right platform and this is sort of the turbo charge I think someone spoke about so I think there are models evolving in the sector there are other methods of aggregating capital I can see others in the room who aggregate capital in a slightly different way than the way we do so our challenge is to continue to evolve those models articulate them well and simply as a record I think that's probably the first imperative in terms of the PPP model in its purest sense applying in agriculture I struggle a little bit to see how it could apply to be honest the PPP models I've seen I think I'd struggle to construct it but we shouldn't put it outside the realms of possibility I think everything's up for grabs really if I can just build on that there are some innovative models when you look in terms of trying to attract capital Murray-Golwyn and its hybrid structure where it's now raising capital from the public markets sunrises obviously working on a similar sort of hybrid structure so there is some really good innovation being done in terms of means to raise capital and it's an interesting trend to see the increasing number of agri-related firms that are seeking listing on the ASX they've been quite a number recently so you think the sort of hybrid cooperative may find a new life in a number of different structures around the place because I'm looking at Murray-Golwyn it is remarkable that it works really I think there's a small track there now that's been built and I'm sure other cooperatives are looking for means by which to grow as well as to access capital we'll look at those sorts of hybrid structures Thank you for finishing off on the productivity piece I think the other thing that from a productivity perspective is let's not lose sight at the end of the day the biggest component of our sector is the family farm and the most important things for them and the person who is asking the question so touched on this is access to information a lot of our farmers as I go around Australia struggle with access to information in other words access to the internet the ability to be able to move information from them to their farm adviser and back again the ability to be able to source information freely and the like that sort of thing allowing our family farmers to build their skill levels to actually have access to market information to understand what they should be growing multing barley or feed barley how they assess the market implications of that to improve their operational skills to improve their indeed just their bookkeeping skills inside running the business to understand their cost structures and how they can better manage their cost structures those sorts of things we can't lose sight of those grassroots elements that for a lot of people they still struggle with because they don't have a regular reliable connection of services to others that they need to connect in with it's a good point and we should take it to the next level I think one of the great challenges for the sector is to get better at gathering information and data more broadly if we look at investment capital it has a strong appetite to be able to benchmark and to seek comparable data in order to validate an investment thesis or a proposition the industry still has a way to go there's some great work being done by A-bears and others in gathering bottom up data but you know I still think we've got a long way to go to be as sophisticated as other investment classes to enable that capital to evaluate us more appropriately I just have one question to end on and we talked to the issue of water was raised now there still is so clean way to invest in water do you think there's going to be a time where we're going to have a listed water company we've had people like the Carl Betzers and other water barons but do you think that is going to come and be of interest to investors? So there is a water trading fund available to investors my experience with investors is there are different levels of appetite so our investors seek exposure to water through farm land and water being coupled in a single portfolio I think that's one approach but water is obviously a hugely valuable resource I think we can expect it to feature in many product structures in the future Absolutely All right well for me this has been just a terrific plenary I've really enjoyed the input from all four of you so close to all these challenges thank you very much for your questions we'll now go to lunch but if I can just thank Elizabeth, John, Damian and David very much for their time