Australia Agriculture Reforms: Impact on Economy and Farmers

This article discusses the impact of agriculture reforms in Australia on the economy and farmers. It covers the positive and negative effects of reforms on the agriculture sector, including legislative and financial commitments, trade relations, taxation regime flexibility, water reforms, and technological advances. The article also highlights the impact of reforms on employment opportunities and the demand for Australian agricultural produce.

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Economics and International Trade
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INTRODUCTION
Largely, the performance of the agriculture industry in Australia is responsible for 0.9 %
of the overall 1.9 % growth of its gross domestic product. Recently, the contribution of the
Australian agriculture industry to its gross domestic product has been
significant (Johnson 2017).The improved performance in the agriculture sector is due to the
reforms that have taken place in the country. The effects of these reforms on the Australian
economy and farmers has been both negative and positive. Primarily, the legislative and financial
commitment of the Australian government through funding of research and development
initiatives, financial and technical support through the drought policy program ,subsidies ,price
support mechanisms and financial support during the dairy farming adjustment phase have
contributed to the growth in revenue for the government through taxation and increased income
for them respectively. The impact of these reforms has been the development of newer farming
methods and equipment, employment opportunities, loss of employment opportunities due to the
invention of agro-based robots and increased competitiveness of agricultural produce.
In addition, the Australian agricultural market has expanded its markets due to the
productivity and competitiveness of their products. Also, stronger trade relations between the
United States of America and Australia has boosted the performance of the agricultural sector
due to the mutually recognized food safety standards between the two countries. Small farm
enterprises have been the greatest beneficiary of taxation cuts .Particularly, small business with
an annual turnover of less than three million dollars. Also, the fact that current legislative
instruments have been incorporated into the agriculture sector has equally boosted the security of
the Australian agricultural produce through structural internal measures for exportation of

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goods and prevention of foreign diseases and pests from foreign countries produce. All in all, the
reforms have affected the performance of the sector.
AGRICULTURE INDUSTRY REFORMS IN AUSTRALIA
Recently, the Australian government has enacted important regulations which directly
impact the performance of farmers in the country .In the year 2017, the Export control bill was
introduced by the Australian parliament to address the modern exportation challenges facing
farmers and exporters in the industry (Department of Agriculture and Water resources N .d).The
export legislation is intended to provide a modern export platform for the exportation of
agricultural produce having taken into account the challenges of globalization. The agricultural
produce exportation department will be efficient and conducive for business in the event that the
current bill is incorporated into Australian legislation. Noteworthy, the Australian dairy industry
has experienced change over the past few years. The Australian government rolled out a
financial adjustment assistance after the massive exit of dairy farmers from the
industry .Essentially, the Australian dairy market deregulation took place in the year
2000(Department of foreign trade and affairs N .d).Currently, dairy farmers in Australia are
susceptible and exposed to market forces which directly impact their actions and income.
Hopefully, the enactment of the Export control bill will boost the trade volume of
Australia’s agricultural produce. The Bill is expected to provide adequate protection for farmers
and exporters when it comes to exporting and dealing with export based agricultural produce.
Previous exportation regulations are currently ill-equipped to handle the modern challenges
facing the export processing zones due to the effect of globalization. Following the harsh
economic times facing the dairy market, certain dairy farmers had to be bought out by other
farmers and by the Australian government. This adjustment phase required the financial

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assistance of the Australian government (Harris N .d).During this adjustment phase, there was
investment uncertainty into the dairy market thus reduced production and manufacture of dairy
products. Also due to the uncertainties facing the dairy sectors, most employment opportunities
in the dairy market were lost following the drastic reduction of dairy farmers. The
unemployment rates in the country increased due to this dairy market restructuring. Also, the
prices for dairy products went up due to the limited supply of dairy products despite the growing
demand for dairy produce in the country.
In addition, there was limited exportation volume for dairy produce from the Australian
farmers following the market deregulation and adjustment phase. These changes in the dairy
sector led to a significant drop in revenue contribution to the gross domestic product by the
sector. There was instability in the dairy produce prices due to the transitioning phase of the
sector. Unlike the Export control Bill, the Australian government has enacted the Biosecurity
Act. The Act was enacted in the year 2015 to replace the Quarantine Act. Primarily, the object of
the Biosecurity Act is to protect Australian agriculture produce from foreign threats of pests and
diseases (Department of Agriculture and Water Resources N. d).Following its enactment, the
Australian farmers have faced little or no foreign threats of pests and diseases to their produce. It
can be said that the Australian agricultural industry mainly battles domestic threats of pests and
diseases following the inception of the Biosecurity Act. In addition to protection farmers produce
from foreign pests and diseases, the biosecurity Act has been effective in providing a balance
between protecting agricultural produce from diseases and pests and also promoting trade
relations in agricultural produce.
Moreover, taxation regime flexibility has been observed in the agricultural sector of
Australia over the years. Friendly taxation practices are likely to encourage investment as

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opposed to saving .Typically, high taxation rates are not favorable to the income and investment
of farmers (Vidot 2017).Since the year 2015,small farm businesses in Australia have enjoyed tax
cuts. The Australian government wanted to boost the performance and expansion of small
farming enterprises through reducing the taxation brackets for the farmers’ revenue with a
turnover of less than 2 million dollars and below. This move has led to the expansion of small
sized farming businesses into large farm businesses due to the increase in income following low
taxation rates for their businesses. Also, small business have enjoyed future tax exemptions
(Marshall 2015).This taxation incentives have grown small farm businesses which have
increased the employment opportunities in the agricultural sector. Primarily, growth in size of
business inspires the need for more labor force thus increased labor opportunities in the
agricultural sector over the years. However, the taxation benefits were only enjoyed by small
rather than big farms.
Further, the effects of the Australian water reform s has been felt in the agricultural sector
Over the years, the water infrastructure in Australia has been facing various challenges such as
aging, depletion, overuse among others. However, following the Australian government
financing of water infrastructure changes over the years, water sources have been conditioned to
serve the agricultural purposes of irrigation and transport more efficiently(Pittar N.
d).Particularly, the Australian government did set aside $USD 300 Million towards its water
reform initiative according to the Competitiveness White paper of 2017(Vidot 2017).The
implementation of the water system reforms are implemented through the National water
infrastructure Fund. In addition to boosting agricultural performance, the Australian government
through the competitiveness Paper has tasked various departments to boost the competitiveness
of agricultural produce through advertising and regulating the environment within which

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agricultural produce is produced .Primarily, the ACCC is tasked with the mandate of maintaining
a fair level ground for agricultural practices so as to boost their performance and productivity.
Predominantly, the financial subsidies to the Agriculture sector in Australia have been
given by the government (Gray, Emer & Sheng 2014).In addition to subsidies, the tobacco and
sugar industries have been the recipients of supportive price mechanisms over the years.
However, in recent years, the Australian farmers is among the least subsidized farmers in the
world due to recent financial cuts to the sector (Farmers.Org 2017).Prior to the price support
initiatives by the Australian government to the tobacco and sugar agricultural sectors, the
production volume in the respective areas had reduced significantly .However, through the price
support system, there was increase in the production of sugar and tobacco due to the better
pricing. Also, the income for tobacco and sugarcane farmers slightly increased. Also, through the
introduction of the drought policy program, the volume of agricultural produce during dry season
has increased significantly. Through the drought policy program, the Australian government has
provided training, financial and technical support to farmers during and after dry climatic spells.
Also, technological advances in the agricultural sector has contributed to the growth of
productivity and competitiveness of Australian agricultural produce. The Australian government
has invested financially in the research and development of its agricultural among other sectors
Specifically, the Australian government made an allocation of USD 180.5 million towards a
competitive grant program (Department of Foreign affairs and Trade N .d).The program is aimed
at promoting innovation and research in the field of agriculture for better and efficient production
and quality of agricultural produce. There have been notable innovative farming techniques and
equipment in Australian field of agriculture which has contributed to the increased and efficient
production levels in the country(Department of Agriculture and Water resources N .d).Organic

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farming has been encouraged through innovative environment friendly farming practices.
Through the innovative farming ways, Australian farmers have embraced better, efficient,
productive and environment friendly farming practices which have made their revenue and
quality of produce increase alongside reduced carbon emissions to the environment.
Notably, the innovation capability of Australia is ranked among the best in the world. The
research and development efforts in Australia has boosted its production and exportation levels
thus leading to increased foreign revenue (White 2017).Due to the incorporation of modern
farming ways, the quality of agricultural produce by Australian farmers has improved and grown
over the years. Not only has the quality of the produce grown but also the sales volume. Usually,
good quality is a competitive advantage for the Australian farmers thus the increase in revenue
margins over the years in the agriculture sector(Langridge 2014).The research and development
efforts in Australia have borne fruits with the development of modern agricultural based
robots(How Agricultural robots..2018).The robots are very fast, efficient and increase production
and quality as compared to human labor. Due to this benefits the agriculture sector production
and quality have grown. However, some farm laborers have lost their employment opportunities
due to the fact that their employers have adopted machine labor instead of human labor thus the
assertion that innovation might cause negative impacts on human livelihoods.
Consequently, there has been increase in the overall Australian unemployment rates
owing to the adoption of farming technologies .Particularly, the tea-picking industry has been
affected due to the adoption of tea-picking machines which have substituted human labor.
Despite these negative effects of unemployment, robots are perfect labor substitute in the case of
fast aging farmers. The fact that most of the young generation prefer white collar jobs leaves the
aging population in the agriculture sector. Owing to the devolution of robots in the agricultural

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sector, faster harvesting has been done, faster production, faster spraying through the use of
drones .Essentially, robots in agriculture have made some agricultural process faster and more
efficient (SBS News 2018).Through the use of innovative farming, there has been increased
production of agricultural produce thus increased income for Australian farmers and the
government through taxation(Government of Australia N. d).Australian government has various
research institutions dealing with different sectors of the economy.
Further, there has been a growing demand for Australian agricultural produce (Ferguson
2018).The top trading partners for Australian agricultural produce is the Chinese and American
economies, alongside other Asian economies. The increase in demand for Australian produce has
triggered an increase in supply for Australian agricultural produce (Mclver & Bajada 2012).This
increase in produce has increased the income for Australian farmers .The demand for Australian
agricultural produce is also boosted by the high productivity levels which are a competitive edge
on the global trade scene. The productivity levels of the Australiana agricultural produce has
grown annually. Due to the incorporation of innovative ways of farming, there has been
production efficiency which has grown over the years thus making Australian produce more
attractive to the global markets. The competitive advantages of Australian agriculture produce
stems from use of technological advances in the production and processing of agricultural
produce. Also, the demand for its produced has greatly boosted its sales and increased the supply
for agricultural produce thus increased revenue from agricultural produce by the farmers.
Currently, the signing of the food and safety regulation agreement between the United
States of America and the Australian government on behalf of its farmers has grown the market
base for its agricultural produce (Export.Gov 2017).The agreement is a mutual recognition
arrangement of the safety standards for their respective agricultural produce. This recognition of

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standards has increased the level of agriculture produce being exported between the two
countries (Fowler, Stanley & Langdgraft 2018).
CONCLUSION
Most definitely, reforms have taken place in the Australian agricultural sector. Its effects
have been majorly positive. The Australian government reforms have been through funding of
research, water industry reforms, adjustment phase funding, drought policy funding, subsidies
and price assistive mechanisms. Through taxation cuts, small farming businesses have benefited
at the expense of large farming enterprises. Notable developments have been encountered in the
agriculture sector due to this reforms, increased production, competitiveness and income from
agricultural produce. Whereas employment opportunities have been created in some instances
robots have caused loss of jobs.
Moreover, modern technological advancement such as biogenetics, seasonal forecast,
biotechnology and cloning have been achieved through government support of research and
development .Regarding modern farming innovations, the Australian government has enhanced
contractual protection of small farm business when it comes to digital innovations(Wiseman
2016).The Australian laws require a standard and mandatory terms of use agreement to secure
the rights and privileges of innovators.Also,the mandatory terms of usage agreement is meant to
encourage innovation and research in the field of agriculture .It is important that technological
advances in the field of agriculture preserve jobs .All in all, the reforms in the agriculture sector
have caused negative and positive impacts on the lives of farmers, exporters and consumers of
agricultural products in Australia and globally.

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