Professor David Hughes, University of London, was in WA last week to address the Agriculture Department's Livestock Updates on where the global food industry stands at the present time. Professor Hughes also addressed a group of small food industry business owners at Gingin.

He said the future could be hard for agriculture.

"There is a convergence of oil price spikes and food inflation, which is a similar pattern to what happened in 1973, only the industries will not recover," Professor Hughes said.

"Food prices over the past 30 years have decreased, while people 30 years ago were spending 25 per cent of their income, today people are only spending up to 12pc."

Professor Hughes said that the industry should be aware that there is now less water, land, stocks of grain and oil.

"However there are more people, urbanisation, dietary and climate change occurring throughout the world," he said.

"Agriculture, agribusiness and food will be a struggle, it will be hard to manage risk.

"While the consumer is affected by both rising food and oil prices, less money will be spent on food.

"Unless you have a quality product that consumers are willing to buy it will be a squeeze. Producers will need to develop a niche brand."

Professor Hughes said that there is gobalisation in the food industry.

"We need to know what consumers want and they want products that are better for them, better for the environment, the world, for animals," he said.

"The largest food companies in the world have done their research.

"They want to be a part of the solution, not the problem, consumers are becoming increasingly health conscious."

He said consumers are willing to pay more for food that is healthy for them, organic, ethical and good for the environment.

"The consumer doesn't want to feel guilty about what they are eating," he said.

"Globally, consumers are very sensitive about the ethics of how their food is produced.

"In New Zealand the wine industry is moving toward being free of carbon emissions in the near future.

"People will be more willing to pay a premium for a product that is less harmful for the globe.

"Within Europe the impact on production in terms of carbon emission is very important.

"It will not be long before all food products have carbon counts on them and increasingly consumers will be influenced by this."